Why Your Life Insurance Claim Takes So Long
Usually life insurance companies take 30-60 days to process a beneficiary’s claim for death benefits, but often payouts get delayed. This article explains the various circumstances under which a life insurance may reasonably delay paying your claim.
If none of these reasons seem to apply to your claim, contact the experienced life insurance lawyers at Boonswang Law. We have helped thousands of life insurance beneficiaries nationwide get their payout, and we can help you too. You may even be entitled to interest on your claim for death benefits due to the delay! Call us today to discuss your claim – free of charge!
Why Life Insurance Companies Delay Claims
Life insurance companies can reasonably delay paying life insurance claims for the following reasons:
- Investigation of the insured, death within the contestability period
- Late-filed death benefit claims
- The insured died as a result of homicide
- Missing documentation
- The beneficiary changed shortly before death
- Unclear beneficiary designation
- The primary beneficiary has died, and there are not two primary beneficiaries
- The policy has no beneficiary
- There is a beneficiary contest
Reasons a Life Insurance Claim Delays
The Insured Died During the Contestability Period
If the insured dies within the first two years of the policy term, called the “contestability period,” the life insurance company has the power to investigate the insured’s responses to the questions on the initial application and medical questionnaire. This investigation can delay the beneficiaries’ payout.
If an investigation shows that a fact was omitted or is untrue on the insured’s application for life insurance or medical questionnaire, the life insurance company has the power to rescind the policy – meaning, the policy gets cancelled as if it never existed. Life insurance rescission exists as a matter of policy to deter those applying for life insurance to lie to get a lower premium payment. However, many times, innocent mistakes are harshly punished with rescission and the beneficiaries get nothing.
In cases of rescission, we are often able to get our beneficiary clients paid by showing that the insured had no intent to deceive, or by showing that the omitted or mistaken fact had nothing to do with the insured’s cause of death. In these cases we often settle with the life insurance company for the amount of the death benefit minus what the insured would have paid in premiums had the life insurance company known of the omitted or mistaken fact.
If your life insurance claim is being delayed or was denied due to alleged misrepresentation and life insurance policy rescission, call our experienced life insurance attorneys for help. Do not take no for an answer!
Click here if the policyholder died after the contestability period.
The Beneficiary Files a Claim Late
If there are multiple beneficiaries and one does not file their claim at the same time as the others, that delays payment of the other’s claims. Also, if a beneficiary takes months or even years after the death of the insured to file their claim, the life insurance company will take time to look into it.
Death Due to Homicide
If the insured was murdered, the life insurance company will wait to pay a claim until the beneficiary gets cleared of the crime by police. This often delays the payout, as a murder investigation can take some time.
Inaccurate or Insufficient Documents
If the beneficiary does not submit a death certificate, or does submit a death certificate but it does not contain the information the life insurance company requires, this delays payment of beneficiaries’ claims.
Delay in payment of death benefits is frequently a problem when the insured dies overseas. Foreign documents that do not contain the same information as a domestic death certificate will be insufficient proof of death for the insurance company. Often, a beneficiary has to go back and forth with the foreign government involved to try to get the insurance company the documentation they need.
If your claim is being delayed because the insured died in a foreign country, call us. Our experienced life insurance attorneys help you get what you need to get your payout.
The Beneficiary Changed Shortly Before the Insured’s Death
If someone challenges an eleventh-hour beneficiary designation due to duress, fraud, or lack of competence, the life insurance company will delay paying any claims until confirming the rightful beneficiary.
Vague Wording Designating Beneficiaries
Those with life insurance must be very specific when naming beneficiaries, otherwise problems arise identifying them and there will be a delay in payment until they get identified.
For example, Frank has a life insurance policy and dies within the policy term, leaving 2 children from a previous marriage, one out-of-wedlock child from a brief relationship, and another child from his second marriage. Frank calls his second wife’s son his son, but he has not formally adopted that child.
Frank designates “all of my children” as his life insurance beneficiaries. Who does he mean? All four children? Not the one born out of wedlock? Not his second wife’s son? You can see how problems arise.
The Primary Beneficiary has Predeceased the Insured
When the primary beneficiary dies before the insured, the proceeds pay out to the secondary or contingent beneficiaries. Identifying and locating these beneficiaries can delay everyone’s payout.
The Policy Lists No Beneficiary
If the primary beneficiary predeceases the insured, there are not two primary life insurance beneficiaries, and there are no secondary or contingent beneficiaries, the death benefit will likely pay out to the insured’s estate. If the insured intended to change the beneficiary but did not complete the process, this will also delay payment of death benefits until the rightful beneficiary gets identified.
If the insured lived in a state that has a life insurance evocation-upon-divorce statute and failed to update the beneficiary designation to someone other than the ex-spouse, then there is no beneficiary and the death benefits pays to the insured’s estate.
There is a Beneficiary Contest
If someone challenges the beneficiary designation for any reason, that will delay payout until the rightful beneficiary gets identified. Life insurance beneficiary disputes happen when:
- The insured changed beneficiaries just before death under duress
- The insured changed beneficiaries just before death lacking competence
- Someone other than the insured changed the beneficiary designation
- The insured changed an irrevocable beneficiary designation
- The insured failed to name an ex-spouse as a beneficiary per a court order
- There is evidence that the insured intended beneficiaries but did not complete the process
- The insured failed to name a spouse or ex-spouse as a beneficiary in a community property state
If you are a life insurance beneficiary and someone is challenging that designation, call us. We can help you defend your position. Similarly, if you think you should be a life insurance beneficiary but are not, we can help you contest the beneficiary designation.
How to Speed Up a Life Insurance Claim Payout
- Have the Death Certificate Ready
- Contact the Life Insurance Company as Soon as Possible After the Death of the Insured
- Include All Required Documents When You File Your Life Insurance Claim
How a Life Insurance Lawyer Helps
The experienced life insurance lawyers at Boonswang Law will discuss your claim with you, advise you as to your rights to the death benefit, and if you are entitled to get a payout, negotiate with the life insurance company to get your payout and if necessary, litigate against the life insurance company.
We take life insurance cases on contingency only, meaning that we do not get paid unless and until you do. Trust us to handle your life insurance claim. Call us today at 1-855-347-1279 for your free consultation.