This article will explain the common ways in which life insurance companies underpay valid beneficiary claims for death benefits and the reasons why.
If your claim is denied for a valid reason, there may be a way to negotiate a settlement for part of the claim depending upon the reason that the claim was denied. In some instances, settling for a portion of the death benefit is better than getting no payout at all.
If your claim is delayed, you may be entitled to interest. Do not let the life insurance company make money from keeping you waiting for your payout. Get your entire payout, including claim interest.
Our life insurance attorneys can help you if your life insurance claim is delayed or denied. If you are a life insurance beneficiary anywhere in the United States, we can help you get paid. Call us for your free, no-obligation case evaluation. We do not get paid unless you do.
Life Insurance Companies Only Make Money When They Don’t Pay Life Insurance Claims
Life insurance companies are like any other company – they are responsible to their shareholders to make a profit and provide dividends on their investment.
For this reason, life insurance companies will use any excuse to deny or delay paying a life insurance claim for death benefits. Life insurance companies hope that beneficiaries are unaware that they can fight the delay or denial, and will just take no for an answer.
We get beneficiaries’ claims paid every day. Call us for help, and we may be able to get you paid, too.
A Life Insurance Company May Initially Deny a Life Insurance Claim Due to Lapse or Termination, But You May Be Entitled to All or Part of the Death Benefit.
If your life insurance claim was denied because the insured failed to pay premiums and the policy lapsed or terminated, you may still be able to get paid.
Why? Because often the reason that the life insurance policy lapsed or terminated was not the fault of the insured. For example, if the insured was hospitalized and never received the mandated notices of lapse from the life insurance company, the policy may still pay out less the premiums that the insured was responsible for paying.
Lapse When the Insured Should Have Had Disability Waiver of Premium
If a life insurance policy lapses due to nonpayment of premiums, the insured was entitled to a waiver of premiums due to disability, and the insurance company did not approve the waiver, a beneficiary may be entitled to the full amount of the death benefit.
Lapse Due to Employer’s Improper Administration of Group Life Insurance
If the insured maintained group life insurance through an employer, there are several ways you can get paid the death benefits despite lapse or termination:
- Employer failed to provide mandated notices for conversion to private policy;
- Employer failed to provide mandated premium waiver application if the insured became disabled; and/or
- Employer stopped paying premiums for any improper reason.
Beneficiary problems with employer group life insurance are common. In these cases, a beneficiary may be entitled to the full amount of the death benefit payout.
A Life Insurance Company May Initially Deny a Claim for Death Benefits Due to Misrepresentation, But You May Be Entitled to All or Part of Your Claim.
A life insurance company will deny a claim if there is any indication that the insured misrepresented themselves on the initial application or medical questionnaire, even if the alleged misrepresentation had nothing to do with the cause of death.
However, there are circumstances under which the beneficiary can get the death benefit minus what the insured would have paid in premiums if the life insurance company knew of the missing fact.
Common mistakes or omissions that a life insurance company will call a misrepresentation include:
- Misstating year of birth;
- Misstating address;
- Misstating employment;
- Misstating marital status;
- Omitting a health condition of which the insured was unaware;
- Omitting any medical condition because the question on the application was unclear;
- Failing to disclose a past medical condition because the question was unclear.
These are all examples of information that factor in an insurance adjuster’s assessment of the risk that the insured will die within the policy term, and policy premiums are calculated accordingly.
Those at greater risk of dying within the policy term will pay higher premiums than those at less risk. For example, if an insured misstated their year of birth, such as transposing digits from 1967 to 1976, they will pay less in premiums than if the adjuster knew their real age because someone born nine (9) years later is less likely to die within the policy term.
In this case, as long as there is no indication that the insured intended to commit fraud, a top life insurance law firm can help you negotiate with the insurance company to be paid the death benefit minus the amount in premiums that the insured would have paid if the insurance company knew their real age.
If Agent Mistake or Negligence Caused the Alleged Misrepresentation, You May Be Entitled to the Entire Death Benefit
It is common for an insurance agent to fill out an application for the insured when the insured visits the agent’s office or the agent comes to the insured’s home to sell a policy. The agent will typically access the life insurance company’s online application, ask the insured questions, and type in the answer.
Under these circumstances, mistakes or omissions are not the fault of the insured and do not constitute misrepresentation:
- The agent makes a mistake;
- The agent fails to ask a question and answers it themselves;
- The agent receives a truthful answer from the insured but inserts a different answer;
- The agent coaches the insured to answer incorrectly;
- The agent fails to ask about obvious medical conditions, such as the insured being in a wheelchair, having a cast on their arm, or needing a respirator to help breath;
- The agent fails to ask follow-up questions if the insured answers in such a way as to indicate there is an underlying medical condition (for example, if the insured takes insulin) but has not disclosed that the person has diabetes.
An experienced life insurance beneficiary attorney can investigate the alleged misrepresentation, and if any of these circumstances apply, you may still be paid a portion or the entire death benefit.
An Insurance Company May Delay Paying a Life Insurance Claim – You Are Entitled to Interest!
- The insured died as a result of a crime;
- The insured died in a foreign country;
- The insured died during the contestability period;
- The insured may have committed suicide;
- The insured may have died due to one of the policy’s exclusions from coverage;
- There is a beneficiary dispute.
Life insurance companies must pay claims within a “reasonable” time, otherwise they must pay the beneficiary interest on the death benefit. Typically that means insurance companies will pay valid claims within 30-60 days, but if they delay paying a claim any longer, contact us. We can help you get paid your entire life insurance claim, which could include interest.
Don’t Take No For An Answer! Our Experienced Life Insurance Lawyers Can Help You Get Paid.
If your life insurance claim has been delayed or denied, we can help. You may still be entitled to partial death benefits, the entire death benefit, or the entire death benefit plus interest. Know that if we take your case, we expect to win! Call to schedule your free, no-obligation case evaluation as soon as you get the sense that you are not getting paid on a life insurance policy.