Category: Life Insurance Claims

Was Your Life Insurance Claim Denied Due to Lapse?

If there was a lapse in coverage, your claim will be denied. But don’t take no for an answer!

Our life insurance attorneys have gotten many clients paid on lapsed policies. Lapse is one of the most common reasons a life insurance claim is denied, however, in many instances we can get the claim denial reversed if we show that the lapse was not the fault of the insured.

Contact us to speak with a life insurance claim lawyer about your claim and find out whether the life insurance company should pay your claim on the lapsed policy. We only take cases on a contingent basis, meaning we do not get paid unless you do, so you have nothing to lose.

How to Get Paid on a Lapsed Life Insurance Policy

Life insurance is a highly regulated industry. Life insurance companies must follow strict procedures when an insured’s premium is late or premiums have not been paid for some time, and the policy lapsed or was terminated. Sometimes they don’t.

The laws that control payment lapse or termination for non-payment of premiums are updated frequently, requiring life insurance companies to update their contracts and procedures. Often they fail to do so, or fail to do so in a timely fashion, and a policy will fall through the cracks.

Frequently, our life insurance lawyers have shown that the life insurance company failed to follow the law and improperly cancelled the life insurance policy. In the case of lapse of employer-provided group life insurance, our life insurance attorneys have shown that the administrator of the group life insurance plan failed to follow the law. In these cases, the beneficiary can be paid despite the lapse in coverage.

Our life insurance attorneys thoroughly investigate each case of lapse to determine whether the lapse was not the fault of the insured. Here are instances where we’ve gotten our clients paid on a lapsed insurance policy.

If the Policy Lapsed Because the Insured Did Not Receive Notice, the Beneficiary May Be Paid

If the insured never received notice of the lapse, or received inadequate notice under the law, you may get the death benefits paid under certain circumstances.

Case Study:  where the insured fell into a comatose state and the family never received notice that premiums were past due, only notice of lapse and termination, we were able to get the beneficiary paid.

If you are the beneficiary of a lapsed life insurance policy, you should obtain copies of any notices sent to the insured and contact our experienced life insurance lawyers to evaluate whether your claim can be paid despite the non-payment of premiums.

If the Insured Died During the Policy’s Grace Period, the Beneficiary May Be Paid

The policy documents will set forth the applicable grace period following non-payment of premiums. If the insured dies within this period, the policy is still in effect and the beneficiaries will be paid the death benefit.

In the case of death during the grace period, our life insurance lawyers can likely get your claim paid. We will need to know the date of death and the date of the insured’s last premium payment. We will also need any notices sent to the insured, if available.

If the Policy Lapsed Because the Insured’s Premium Payment was Lost or Delayed, the Beneficiary May Be Paid

If a premium payment was lost or delayed through no fault of the insured and the policy lapsed, the beneficiaries still may be paid.

This often happens when the insured is in the hospital or assisted living and no longer in control of their finances. In these cases, our life insurance attorneys will investigate whether the insured or the insured’s power of attorney received the required notices regarding non-payment.

If the Policy Lapsed Because the Insured’s Employer Mismanaged the Group Life Insurance Plan, the Beneficiary May Be Paid

Unfortunately, this is common. Because insurance law is complex and many employers attempt to administer their group life insurance plan lawfully but fail, policies lapse and are terminated through no fault of the insured. In these cases, the policy will pay out.

If you are the beneficiary of an employer-provided group life insurance policy, contact our life insurance lawyers for your free case evaluation. We will investigate and determine whether the employer failed to provide an application for conversion to private life insurance, failed to provide an application for life insurance premium waiver for disability, or failed to send the required notices, whether the employer stopped paying the premiums unlawfully.

If the Policy has a Non-Forfeiture Clause, the Beneficiary May Be Paid Despite Lapse

Some insurance policies include a non-forfeiture clause, which means that if the insured stopped paying premiums, their beneficiary will still receive some of the benefit.

You can think of this as a lapsed policy refund. If coverage lapses, the insurance company will refund part of the premium payments and/or pay the policy’s cash value.

With some policies, coverage will not lapse in case of non-payment. Instead, the policy will remain in place but with a reduced death benefit calculated as a percentage of the premiums that were paid.

What is Lapse in Life Insurance?

When someone buys a life insurance policy, the life insurance company’s obligation to pay out to their beneficiaries is contingent upon whether the insured paid their premiums. A lapse in coverage will occur if the insured fails to pay their premiums. If the policy lapses, the life insurance company will not pay the insured’s beneficiaries.

Call Our Life Insurance Lawyers if Your Claim Was Denied Due to Lapse

If your life insurance claim was denied due to a missed payment, reach out to the life insurance lawyers at Boonswang Law. We will determine whether you can be paid!

Was Your Life Insurance Payout Denied After the Contestability Period?

Unfortunately, it’s a common occurrence to find yourself in a situation where life insurance is not paying out. While this most commonly happens during the contestability period, denial do occur after the contestability period as well.

If you have a life insurance payout that has been denied after the contestability period, you can talk to a life insurance lawyer at Boonswang Law free of charge. Call us today at 1-855-865-4335

Why Does The Contestability Period Exist in the First Place?

Life insurance is a contract between the insured and the insurance company. For a contract to be legally enforceable, both parties to the contract have to agree to the same things. For example, if an insurance company believes it is providing insurance for a non-smoker but is really insuring someone who smokes a pack a day, the two parties have not agreed to the same terms.

State law governs contracts and insurance policies. Most states believe that while people should not be able to lie and commit fraud to get insurance, insurance companies also have a responsibility to properly screen applicants and evaluate the risks of insuring an individual before issuing an insurance policy. That is why many states have something called a contestability period for life insurance.

What a Contestability Period Means For You

If an insurance policy has a contestability period and an insured dies within that period, the insurance company has a right to contest the claim. The insurer will review the application for errors and misstatements and may request medical records and other evidence to support or contradict the information on the application.

A contestability period is generally two years, although some states have shorter periods. After that period ends, the insurance policy is generally considered incontestable, meaning that the insurance company cannot deny coverage because of something that happened during the application process.

The Top Three Reasons for Denial After the Contestability Period

There are a few reasons a beneficiary might receive a letter saying, “life insurance payout denied” after the two-year contestability period.

Life insurance Claim Denied Due to Lapse

One of the most common reasons insurance payouts are denied is because someone stopped paying the premiums and the policy lapsed. There is usually a window of time after a policy lapses in which the policy can be reinstated. However, when the policy is reinstated, a new contestability period may begin. If your life insurance claim was denied due to lapse, call us – we may be able to help you.

Life Insurance Claim Denied Due to Misrepresentation

Life insurance claims may be denied after the contestability period if fraud was allegedly committed to obtain the policy. Some states include fraud under the contestability clause while other states allow insurance companies to include a specific fraud exception in the policy. Fraud exceptions say that if the policy was issued based on fraud by the applicant, the insurance company can refuse to pay as long as the fraud exception is in force. The company will have to prove that fraud was committed in order to avoid payment. State law also defines what information or omission can be considered fraud.

If the life insurance company denied your claim due to misrepresentation on the part of the insured on obtaining a policy, call us. We may be able to help you.

Life Insurance Claim Denied Due to Suicide

State law may allow exceptions to life insurance payouts based on the cause of death. Suicide and inherently dangerous sports are common examples of causes of death that insurance companies can exclude. Many policies contain a time period for the exclusions. In most instances, if an insured dies from an otherwise excludable cause after that clause has expired, the insurance company must pay the claim.

If you have received a “life insurance claim denied” notice, and it has been two years since the policy was issued to the deceased, you may have received the notice in error. It is also possible that the insurance company is acting in bad faith. Attorney Chad G. Boonswang has helped many people through the process of getting insurance companies to pay on life insurance claims the company initially denied. Contact Boonswang Law today for a free consultation.

If you or someone you know is struggling with thoughts of suicide, call the National Suicide Prevention Hotline at 1-800-273-8255 to access their national network of local crisis centers that provide free and confidential emotional support to people in suicidal crisis or emotional distress 24 hours a day, 7 days a week.

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