Alleged misrepresentation is one of the top reasons life insurance companies deny beneficiaries’ claims for the death benefits. Find out from the nations’ top life insurance lawyers what misrepresentation is, why insurance companies deny these claims, and what you can do about it should your claim be denied for this reason.
We have gotten many life insurance claims paid when they were initially denied due to alleged misrepresentation on the part of the policyholder, by appealing the life insurance claim denial. If your claim was denied due to misrepresentation, call us. We will discuss your case with you free of charge!
What Material Misrepresentation In Life Insurance Is
“Material misrepresentation” is a lie, mistake, or omission that leads the life insurance company to believe something that is not true about the policyholder, assess the policyholder at less risk of dying within the policy term, and give the policyholder a lower premium payment than they would if they knew the truth.
What Happens When Misrepresentation On a Life Insurance Policy Gets Discovered
Life insurance companies “rescind” life insurance coverage if they discover that the policyholder misrepresented themselves in their initial application for life insurance or their medical questionnaire. A rescinded life insurance policy gets treated as if it never existed.
How Misrepresentation Leads to Policy Claim Denials
When life insurance companies rescind a policy because the policyholder misrepresented themselves on the initial application for life insurance or medical questionnaire, it is as if the policy never existed. A life insurance company will deny a beneficiary’s claim for death benefits on a rescinded policy.
Premium payments are based on the likelihood the policyholder will die within the policy term. Those at more risk pay higher premiums than those at less risk. Life insurance companies assess policyholders’ risk of dying within the policy term based on the information they provide in the initial application and medical questionnaire.
As a matter of public policy, life insurance rescission is intended to deter life insurance applicants from lying or omitting facts on their application to get a lower premium payment.
Examples of Material Misrepresentation
Example #1: Peter intentionally lies about not smoking on his life insurance application, He dies from lung cancer. The life insurance company rescinds the policy and the beneficiaries get nothing.
Example #2: Pauline dies of a heart attack. The coroner says she died of a heart attack due to coronary artery disease. Pauline did not disclose her coronary artery disease on her initial application or medical questionnaire because she did not know she had it. The life insurance company rescinded the policy due to alleged misrepresentation and denied her beneficiary’s claim for death benefits, but the beneficiary’s attorney was able to show that Pauline had no knowledge of her condition. The beneficiary got the payout.
Example #3: Phil lies about his age on the life insurance application knowing he will get a lower premium. He dies and the life insurance finds out his true age from the death certificate, rescinds the policy, and denies his beneficiary’s claim for the death benefits.
Example #4: Phryne mistakenly transposes her birth year from 1968 to 1986. She has dyslexia, which she does disclose. She dies, and the life insurance company rescinds the policy and denies her beneficiary’s claim for death benefits. The beneficiary’s attorney fought back and was able to show that the mistake was not intentional and therefore not fraud or misrepresentation. The life insurance company paid Phryne’s beneficiary the death benefit minus what she would have paid in premiums had the life insurance company known her true age.
Example #5: Pearl dies in a skiing accident while on the black diamond trail. Pearl failed to disclose that she was a skier on her life insurance application. The life insurance company rescinded the policy and denied her beneficiary’s claim for death benefits.
When a Life Insurance Agent Makes a Misrepresentation
Unfortunately, life insurance agents’ mistakes in filling out applications for their clients often cause the life insurance company to rescind a policy for misrepresentation and deny beneficiaries’ claims.
For example, if a life insurance agent mistypes something, or ignores an obvious medical condition such as when their client uses a walker or a wheelchair, that mistake or omission is not the fault of the policyholder. In these cases we can get our client beneficiaries paid!
How a Life Insurance Lawyer Helps Your Case
Often, a mistake or omission is not material, in that it has nothing to do with the death of the policyholder, or it is not misrepresentation, meaning that it was an innocent mistake, the agent make the mistake, the question was confusing, or the policyholder had no knowledge of the missing or incorrect fact.
Our life insurance lawyers know the law in every state in the nation. We know that when the mistake or omission was not the fault or the intent of the policyholder, we can get our clients paid. We investigate thoroughly and uncover the truth for our clients.
If your claim was denied due to alleged misrepresentation, we will do that for you, too. Call us for your free, no-obligation consultation. Know that we only take cases on a contingency basis to minimize costs to you, and that we only get paid when you do!