Articles Tagged with: Cause of death denials
person calculating insurance claim

Delayed Payout? Life Insurance Companies May Owe Interest

If a life insurance company is delaying payment of your claim, you may be owed interest.

When an insurance company denies or delays your claim, they can continue investing the proceeds and accruing interest that would otherwise be in your pocket. The insurer may owe you that interest under certain circumstances.

To find out if you are entitled to interest on your delayed life insurance payout, contact our life insurance beneficiary lawyers. We have over 25 years of experience getting clients paid and getting clients interest on their delayed payout. We can tell you if you are owed interest during your free, no-obligation case evaluation.

How Long Does it Take to Receive Life Insurance Death Benefits, Usually?

Wondering how long insurance companies take to process claims, or how long does it take for a life insurance company to pay out? An uncontested claim for death benefits, where the death of the insured does not require investigation, is usually paid within 30 days. Most states require life insurance companies to respond to a claim within thirty days, whether that response is approval, denial, or a request for more information.

Insurance companies are required to tell claimants which of the reasons life insurance won’t pay out. And when life insurance does not pay promptly, you have a right to know why.

How Can a Beneficiary Get Interest on a Delayed Life Insurance Payout?

If an insurance company unreasonably delays its response to your claim for death benefits, you may be entitled to interest. Whether you are owed interest on life insurance death benefits depends upon the terms of the policy and the jurisdiction governing the policy. 

Some life insurance policies include a provision that entitles a beneficiary to interest after a specified delay in payout.

Many states have enacted statutes that grant interest to a beneficiary of a life insurance policy when an insurer unreasonably delays a claim determination. For example, this Iowa statute explains the circumstances that allow a beneficiary to collect interest and the rate at which the interest is calculated.

Some delays in payment of the death benefit are considered inherently unreasonable, including:

Delay in Life Insurance Payment after Claim has Been Approved

Occasionally, an insurer or a company’s agent will tell a beneficiary that a claim has been approved, but the insurer delays sending payment. The longer an insurer retains the funds, the longer an insurer is able to continue investing those proceeds and reaping the profits for its shareholders. Under these circumstances, a beneficiary may be entitled to interest.

Delay in Payment of Claim Because Life Insurance Company Does not Contact the Beneficiary

Frequently an insurance company has reason to know that an insured died but fails to reach out to the beneficiary of the life insurance policy. Often a beneficiary is unaware that they are named in a policy or that a life insurance policy even exists.

If an insurer has reason to know that an insured has died, for example, because they use the Social Security Death Master File to identify policyholders who have died, that insurer should notify the beneficiary promptly.

Recently, several states have brought lawsuits against insurance companies that knew of policyholder deaths but failed to notify beneficiaries, retaining the death benefits and the interest accruing on them instead. Under these circumstances, a beneficiary may be entitled to interest due to the unreasonable delay.

Why Would a Life Insurance Payout Be Delayed?

Payout may be delayed six to twelve months or longer if the insurance company must investigate because:

If you are a beneficiary to a life insurance policy and you’ve submitted your claim and all required paperwork but haven’t been paid, know that the insurance company has no incentive to pay you quickly. In fact, any delay means your payout is accruing interest and benefitting the insurance company’s shareholders.

In the past there were many examples of life insurance companies not paying claims without delay. Fortunately, laws have been enacted to incentivize insurers to pay life insurance claims promptly, and if they do not, they may have to pay you interest.

If you or someone you know is struggling with alcohol or drug abuse call the Substance Abuse and Mental Health Services Administration (SAMHSA) hotline at 1-800-662-HELP (4357) for free and confidential help, 24 hours a day.

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.

How Long Does a Life Insurance Investigation Take?

What is the typical timeline for insurance companies to investigate claims? It varies, depending upon the circumstances of the death. Beneficiaries should be sure to respond promptly to all information and documentation requests from the life insurance company.

After the insured has died, beneficiaries of the life insurance policy file a claim with the insurance company and include a copy of the death certificate with their claim, keeping at least one original death certificate for their records in the event that the life insurance company misplaces the one sent to them.

When the insurance company receives the claim form and a certified copy of the death certificate, insurers have 30 days to deny the claim, pay the claim, or ask for more information.

In some situations, insurers will need to investigate a claim and the payout will exceed 30 days. Depending on the terms of the insurance policy and the laws that govern the policy, sometimes a beneficiary will be entitled to interest that has accrued during the delay of payment.

If your claim has been pending for more than thirty days, whether you have heard from the life insurance company or not, contact our experienced life insurance beneficiary attorneys. We help beneficiaries nationwide get paid with interest when their claim has been unreasonably delayed. 

When Will Life Insurance Companies Investigate Claims?

In most cases, an insurer will either deny a claim or pay a claim within 30 days. When there is a delay in life insurance payout instead of denying or approving, it may mean that an insurer requires more time to investigate the claim. Delays will likely occur in the following situations:

Delay in Life Insurance Payout When the Insured Died by Homicide. 

When an insured is murdered, the insurance company often waits to pay any benefits until the investigation is completed. Depending on the type of policy in question (term life, whole life, or AD&D insurance), the insurance company may need to know whether the beneficiary is associated with the murder or whether the insured was engaged in a felony at the time of his or her death

Delay in Life Insurance Payout When the Insured Died in a Foreign Country.

If the insured dies while abroad, an insurance company may take longer to investigate the circumstances of the death.

Insurers always require proof of death when a claim is made. In the U.S., a death certificate is acceptable proof of death. However, customary practices, records, and technologies vary across countries and continents, and a foreign death certificate may not satisfy the insurance company. Also, to ensure a claim for overseas death is not fraudulent, an insurance company may attempt to confirm the circumstances of the insured’s death independently. Depending on where the insured died, this may extend the investigation period significantly.

Delay in Life Insurance Payout When there is a Beneficiary Dispute.

If the insurance company is notified that multiple parties might have a claim to life insurance proceeds, it will postpone paying the benefit until a rightful beneficiary is established. Often, the insurance company will not make this determination itself. The insurer may file a life insurance interpleader action, and a court will decide the lawful beneficiary.

Case Study #1: the insurance company delayed paying for over two years because the insured had a girlfriend and child and neither was named in his policy. Luckily for our client, Illinois law prevents such improper claim practices and unreasonable or vexatious delay in paying claims, and we were able to get our client paid.

Delay in Life Insurance Payout When the Insured Died Within the Contestability Period.

The contestability period lasts for two years. During this time, an insurer is authorized to investigate to look for evidence of fraud and misrepresentation in life insurance application and medical questionnaire. If the insured dies within this two-year period, a payout of benefits may be delayed while the insurer examines medical records, financial records, or other relevant evidence.

Delay in Life Insurance Payout When the Insurance Company Makes an Administrative Error.

Case Study #2: payment of our client’s claim for death benefits was delayed because the insurance company never received medical records from a doctor that the insured never visited.  

If your claim is denied, please get all the details you can about the reason for the denial: it may be something as simple as a mistake such as this preventing you from getting your life insurance payout.

Delay in Life Insurance Payout When the Insured Never Received Notice of Lapse or Termination.

Case Study #3: Our client’s claim was denied because the policy lapsed and terminated due to non-payment of premiums. We investigated and found that the insured never received the statutorily-required notices. We got our client paid.

What Can a Lawyer Do if a Life Insurance Payout is Delayed?

An experienced life insurance lawyer will be able to tell you whether the delay can be turned into approval and whether you are entitled to interest for the time of the delay. Do not rely on an insurance company to tell you that you are entitled to interest – they have no incentive to do so.

Our life insurance attorneys can demand and obtain the full death benefits you are legally entitled to. Again, your right to interest depends on the jurisdiction in which the policy was issued and the terms of the policy itself, and we help beneficiaries get paid in jurisdictions across the nation.

For more information about your rights to interest on a delayed payout of benefits, contact a trusted life insurance attorney at the Boonswang Law Firm with your questions. Your initial case evaluation is free of charge, and if we take your case, know that we don’t get paid unless you do.

woman sitting on park bench

Can You Collect Life Insurance if Someone Commits Suicide

Will a life insurance policy pay out for suicidal death? Perhaps.

Whether a beneficiary can collect life insurance if the insured kills themselves will depend upon the timing of the death relative to the purchase of the life insurance policy, the policy exclusions, and whether the death was suicidal or accidental.

If your life insurance claim was denied after the suicide of the insured, give us a call. Your initial case evaluation is free of charge, and our life insurance beneficiary lawyers only take cases on a contingency basis, which means we do not get paid unless you collect your life insurance claim. Don’t take no for an answer! Let us fight for you!

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.

Life Insurance Companies Will Try to Avoid Paying Claims on Suicide

Many people believe that if an insured commits suicide, claims for life insurance death benefits are automatically denied and cannot be contested or appealed. This is not necessarily the case.

As with many issues involving the law, “it depends.”  Whether life insurance companies will pay out death benefits after the insured allegedly commits suicide depends on three things:

  1. how long the insured had the life insurance policy before they passed;
  2. the specific terms of the life insurance policy itself; and
  3. whether the death was accidental and only looked like suicide at first glance.

Your Claim Will Be Denied if the Suicide was within the Contestability Period

The amount of time that elapses between when the insured purchased a life insurance policy and when they passed is extremely important in determining whether their policy will be paid to their beneficiaries.

The first two years after the insured purchases the policy is called the contestability period, within which the life insurance company can deny claims for a wide range of reasons, including suicide. Life insurance companies are permitted to deny claims when the insured dies due to suicide in order to dissuade those who are considering committing suicide from purchasing a policy shortly beforehand, to provide a windfall for their beneficiary.

To determine whether your claim was properly denied due to suicide within the contestability period, you should contact our life insurance attorneys for your free case evaluation. We can help you determine whether or not you are entitled to the death benefits and we will fight the life insurance company on your behalf if you are.

A Life Insurance Exclusion May Exclude Coverage for Suicidal Death

If the insured committed suicide after the contestability period expired, a life insurance “exclusion” may exclude death by suicide from coverage under the policy, and your claim may still be denied.

Again, a suicide “exclusion” is meant to keep people from buying a policy simply to leave money to their family after a suicide. “Exclusions” are pre-stated reasons that the life insurance company will not pay a claim for benefits and are found in the text of the life insurance policy itself. A typical suicide exclusion will state that no death benefit will be paid if the insured commits suicide or if suicide is the cause of death.

This exclusion is also be called a “suicide provision,” and you should always check a life insurance policy for a suicide provision before purchasing one. A suicide provision addresses the terms and conditions of a payout as well as the exclusion due to death by suicide specifically.

What Looks Like Suicide May Have Been an Accident that is Covered by Life Insurance

If there is any possibility the insured die from suicide, the life insurance company will deny your claim for death benefits. However, many deaths that look like suicide at first glance occur accidentally.

Common accidental causes of death that can look like suicide at first include:

  • Prescription drug overdose
  • Illicit drug overdose
  • Alcohol poisoning
  • Hanging
  • Falling
  • Fatal single-vehicle accident
  • Drowning

The coroner’s report and death certificate must list the cause of death. If the cause of death is listed as something other than suicide, and your life insurance claim was denied due to suicide, call us. We can help you get paid.

If the cause of death is listed as suicide, but you have reason to believe that the insured did not intend to commit suicide, call us. We can help you get your claim paid as the insured intended.

If you or someone you know is struggling with alcohol or drug abuse call the Substance Abuse and Mental Health Services Administration (SAMHSA) hotline at 1-800-662-HELP (4357) for free and confidential help, 24 hours a day.

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.

Our Life Insurance Lawyers Fight Claim Denials Due to Suicide

If your claim for benefits was denied due to suicide, contact our life insurance lawyers. We will review the policy to let you know if the contestability period applies or if a suicide provision was the reason for your denial. It may be that the death of the insured was accidental and not suicide. If there is any way you can still secure a payout, we will find it.

If no suicide provision in the policy excludes suicide from coverage, and the death occurs after the two-year contestability period, then the life insurance company may pay the benefit even if the cause of death is suicide. If we can show that the cause of death was, in fact, accidental and not suicide, the life insurance company may pay.

Our life insurance lawyers can help you get the payout you deserve, and we do not collect any fees unless and until we do. Call us for your free case evaluation, and let us fight for you!

Paragliding

Does Life Insurance Pay for Overseas Deaths?

Was Your Foreign Death Life Insurance Claim Denied? 

Life insurance usually covers death while traveling internationally, but there are circumstances when it may not.

This article will explore the potential problems beneficiaries may encounter when filing a claim for death benefits if the insured happens to die abroad, how to solve those problems, what happens to life insurance if the insured moves abroad, and the instances when life insurance will not cover foreign death.

If you are a beneficiary and your claim for life insurance death benefits was denied or is delayed because the insured died while traveling overseas, call our life insurance claim lawyers. We can help you get paid.

Foreign Death Claims are Often Denied or Delayed

A “foreign death claim” occurs when an insured dies outside of the U.S.

If you fail to inform your insurance company of your foreign destination, the length of time you will be there, and what activities you will engage in while there, your beneficiaries’ claims may be denied due to your misrepresentation. At the very least, your beneficiaries’ claims will be delayed due to the life insurance company’s need to investigate.

Common Reasons a Foreign Death Life Insurance Claim is Denied

It is Challenging to Obtain the Required Proof of Death

If a life insurance policy has been in place for at least two (2) years, the insured should be covered if they pass away abroad. But before a life insurance claim is paid to the beneficiary of the policy, the life insurance company must obtain satisfactory proof of the insured’s death.

If the person died in the United States, a death certificate will suffice. Providing proof of death becomes much more difficult, however, when the person dies overseas. Customary practices, resources, and technology all vary greatly from country to country, which can preclude a country from recording a death in the same way that we do in the United States.

The Insurance Company Will Delay Paying Death Benefits to Investigate

It is common for insurance companies to ask repeatedly for more documentation or to delay paying a claim for death benefits because ostensibly they are investigating the foreign death. 

One case our life insurance lawyers handled arose when the insured died in Ghana on a business trip. A two-year “investigation” commenced into his death, meaning, payment of death benefits to the beneficiary was delayed for two years. Because the insurer did not act in good faith in their “investigation,” in that they made no attempt to verify any of the many documents our client submitted, we got our client paid, at last – with interest!

Our Life Insurance Attorneys Will Help You Get Paid if Your Foreign Death Claim Was Denied 

When life insurance companies are given foreign proofs-of-death or death certificates that look unusual compared to the U.S.’s death recording practices, they often allege that they are being victimized by people faking their deaths and will likely launch their own investigations, delaying payout. They may also deny foreign death claims due to alleged misrepresentation, suicide, or suspicious death. 

 

If your foreign death claim was denied or your foreign death claim payout is delayed, we can help you. Call us for your free case evaluation. Our experienced life insurance beneficiary lawyers work on a contingency basis, meaning, there is no cost to you, and we do not get paid unless you do. Don’t take no for an answer! 

Hospital hallway

Does Life Insurance Cover Accidental Drug Overdose?

Will insurance companies pay a life insurance claim for a death caused by drug overdose? It may, depending upon the circumstances of the death.

If the insured died of a drug overdose within the contestability period, the life insurance company will almost certainly deny your claim for death benefits. Even if the insured died with drugs in their system after the contestability period, the life insurance company may deny your claim.

Wondering what to do if your claim was denied? If your claim was denied because the insured died with drugs in their system or the insured died from a drug overdose or alcohol poisoning, call us. We have gotten many beneficiaries paid under these circumstances, and we will investigate and find out whether you should be paid.

If You or Someone Close to You is Struggling with Substance Abuse, Contact SAMHSA’s National Helpline to Find Help

SAMHSA’s National Helpline, 1-800-662-HELP (4357), (also known as the Treatment Referral Routing Service) or TTY: 1-800-487-4889 is a confidential, free, 24-hour-a-day, 365-day-a-year, information service, in English and Spanish, for individuals and family members facing mental and/or substance use disorders. This service provides referrals to local treatment facilities, support groups, and community-based organizations. Callers can also order free publications and other information.

Is an Overdose Considered an Accidental Death?

Each life insurance policy defines “accidental death” differently. The life insurance laws in each state will define “accidental death” differently as well. Whether the insured died from an accidental overdose of prescribed drugs or an overdose of illegal drugs may also matter.

Unfortunately, alcohol or drug use are among the most common reasons life insurance claims are denied. If you are a beneficiary whose claim was denied due to death by alcohol or drugs, call us. Your consultation will be free of charge, and we do not get paid unless and until you do. We’ve gotten many clients paid when their life insurance claim was denied due to suicide by showing that the death was accidental.

Case study: our client’s claim was denied when an insured died of an accidental drug overdose in his hotel room while on a business trip. We were able to show that the overdose was accidental and not suicide because he had laid out his clothing for the next day.

Does Life Insurance Cover Suicide by Drug Overdose?

Probably not. Suicide is a typical exclusion that is found on most life insurance policies, but it still may be worth your time to speak with a life insurance attorney.

“Exclusions” are the typical reasons life insurance won’t pay out. If the insured committed suicide by drug overdose after the contestability period, whether or not the policy will pay out will depend upon the exclusions in that policy and whether the facts point to accidental death rather than suicide.

If the insured died of suicide from a drug overdose during the contestability period, your life insurance claim will be denied.

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.

Will my life insurance claim be denied if the insured died from prescription drug overdose?

It depends upon whether the circumstances of the death show that the death was accidental or that the death was suicide, as well as the exclusions in the insured’s policy.

If the insured did not disclose that they took prescription drugs on their initial application and medical questionnaire, the life insurance company may deny your claim due to misrepresentation.

Can a Life Insurance Claim be Denied for Drug Use?

Will life insurance pay if drugs are in the insured’s system at death? Perhaps, but it is more likely your claim will be denied initially.

Life insurance companies only make money for their shareholders when they don’t pay claims. They may automatically deny your claim even if further investigation would show that the drugs were not the cause of death.

If the insured was using drugs but the drugs were not the cause of death, your claim for death benefits should be paid. If your life insurance claim was denied, don’t take no as an answer! Call us – we may be able to help.

Case study: we got our client paid when the insured was killed in a motorcycle accident. While he had illicit drugs in his system, drug overdose was not the cause of death.

Typical Exclusions Related to Drugs and Alcohol Include:

  • no benefits will be paid for any loss or covered injury that: “…occurs as a consequence of being intoxicated or as a consequence of taking, using or being under the influence of any narcotic unless administered on the advice of a physician.”
  • Accidental death benefits are not payable when death occurs as the result of taking drugs or medications that are not prescribed to the decedent or when taking them against prescribed orders.
  • In no event will we pay a benefit where loss or injury is caused directly or indirectly by, results from, or there is contribution from, any of the following: (6) motor vehicle collision or accident where you are the operator of the motor vehicle and your blood alcohol level meets or exceeds the level at which intoxication is defined in the state where the collision or accident occurred, regardless of the outcome of any legal proceedings connected thereto.
  • The policy does not cover any loss resulting from injury sustained as a result of being legally intoxicated from the use of alcohol.

Was Your Claim Denied Due to Drug Overdose or Alcohol Poisoning?

If the insured’s death was due to drug overdose or the insured’s death was alcohol-related, and your claim was denied, there may be an argument that the insured’s death was accidental or that the cause of death was not substance abuse or overdose.

We have gotten many clients paid when the insured died with drugs or alcohol in their system. Call us today to schedule your free case evaluation, and let us help you get paid too.

denied graphic

Life Insurance Not Paying Out? These Are The Most Common Reasons.

You may find yourself in a situation with your life insurance not paying out. A life insurance company can refuse to pay a claim for many reasons. What are the reasons life insurance claims are denied?

Just because your claim was initially denied does not mean that you do not have options. You can fight an insurance company when your life insurance is not paying out. Call us at 855-865-4335 to discuss the specifics of your life insurance policy and learn about your options.

Life insurance policies are supposed to protect families and dependents in the unfortunate event of a loved one’s death. Life insurance policies are valid, legally binding contracts between policyholders and insurance companies. So, how is it that your life insurance is not paying out?

Remember, life insurance companies only make money for their shareholders when they don’t pay claims. Here are the most common reasons life insurance won’t pay out.

There was a Suicide Exclusion in the Life Insurance Policy

If your life insurance policy has a suicide exclusion, the beneficiaries will not receive the death benefits if the insured died by committing suicide. Suicide clauses often differ depending on what state’s law applies to the policy.

These exclusions commonly state something along the lines of, “if you commit suicide within the first two years of this contract, the beneficiaries will receive a premium refund, but not the death benefit.”

One common complication with enforcing suicide exclusions is proving that the insured actually committed suicide. It is not uncommon for an insured to die accidentally, resulting in what might look like a suicide.

One case in which we got our beneficiary client paid arose when the insured died due to autoerotic asphyxiation. The autopsy stated that the cause of death was accidental, as the insured had laid out clothing for the next morning. The insurance company had the burden of proving that the insured “purposefully injured himself” (an exclusion) and could not as there was evidence the insured intended to survive.

Keep in mind that although we were successful in this case and many others, we cannot guarantee the result of any other matter. But we can guarantee that at the Boonswang Law Firm, our attorneys have extensive experience in taking on the challenge of disputing these suicide exclusions. As a result of our skill and knowledge in insurance law, we have been able to successfully obtain death benefits for clients who had previously been denied payment in the face of suicide exclusions.

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.

Life Insurance Claim Denied Due to a Drug Exclusion

Many policies also have exclusions that will prevent a beneficiary from receiving the death benefit if the insured died due to illegal drug use and/or even prescription drug use.

Insurance companies often apply this exclusion in situations where marijuana or some other drug was found in the insured’s toxicology report. Insurance companies also will apply the exclusion in cases involving heroin overdoses or when someone took too many prescription pain pills or other medication.

Does life insurance cover drug overdoses? Sometimes. Some states have laws that protect life insurance policyholders who are prescribed narcotics or who are deemed disabled due to addiction.

One recent case in which we successfully got our client beneficiary paid arose when the insured died in a motorcycle accident. The toxicology report stated that the insured had “acute amphetamine intoxication” so our client’s death benefit claim was initially denied.  However, ultimately it was determined that the insured died of injuries sustained in the motorcycle accident some several weeks later, not from a drug overdose the day of the accident.

Of course, we cannot guarantee the result of any matter. However, our attorneys at The Boonswang Law Firm are extremely knowledgeable in life insurance laws across the country and the nuances one must argue when faced with claim denial due to policy exclusions. Our knowledge and experience help us zealously fight for our clients and get them the death benefits they deserve.

If you or someone you know is abusing drugs or suffers from drug addiction, call the Substance Abuse and Mental Health Services Administration (SAMHSA) hotline at 1-800-662-HELP (4357) for free and confidential help, 24 hours a day.

Life Insurance Claim Denied Because the Insured Died During an Illegal Act

This might seem like common sense, but there are plenty of times people do illegal things and don’t realize it. For example, what if you were jogging and unintentionally trespassed on private property? If you had a heart attack and died while jogging, the insurance company will try to deny your beneficiary’s claim because you were doing something illegal when you died.

Life Insurance Claim Denied Due to an Act of War

Most policies have an Act of War exclusion to deny the claims connected to civilians killed in wars. This will commonly apply to first aid and other medical volunteers in an area of conflict, journalists, and others who travel to regions of the world where there is armed conflict.

Claim Denied Because the Insured’s Death Was Due to Another Exclusion

Every policy has a set of exclusions, and they differ from insurer to insurer. If there is any chance the insured’s death was excluded from coverage, the insurance company will leap at the chance of denying a beneficiary’s claim.

This is especially the case in AD&D policies, in which companies will define “accidental” death in a manner that is deliberately hard to satisfy. Common provisions are that the insured must die within 90 days of the injury which caused his or her death and that death in an airplane is not covered if you are a pilot.

Recently we settled a case where the insured died of drowning, but he drowned due to an undiagnosed heart condition. We argued that “accident” is an event that is not a natural and probable result of the insured’s own acts. In this case, there was no way the drowning could have been naturally and probably expected or anticipated by the insured because it was caused by his undiagnosed heart condition. Our client got paid.

Life insurance will often not pay out to beneficiaries’ and try to apply exclusions even when they are legally required to pay out. An insured should disclose participating in any activities that are considered dangerous by the insurance company. This might include skydiving, motorcycle riding, mountain climbing, kayaking, surfing, or anything that could be subject to exclusion under some policies. This way, an insured can get the type of policy that is right for them and their lifestyle.

Claim Denied Due to Misrepresentation On Application

Death benefit claims are frequently denied due to alleged fraud on the part of the insured. If the insured did not disclose a past or present health condition, medications, or past surgeries, did not disclose past or present lifestyle habits such as alcohol or drug use, or did not disclose participation in activities that the insurance company deems dangerous, the insurance company is sure to deny a claim for death benefits if the insured died due to any of these.

If you or someone you know is struggling with alcohol or drug abuse call the Substance Abuse and Mental Health Services Administration (SAMHSA) hotline at 1-800-662-HELP (4357) for free and confidential help, 24 hours a day.

If the insured died during the two-year contestability period, but not of anything he or she failed to disclose on the initial application, the insurance company will still deny the claim. We have gotten our client beneficiaries paid under these circumstances.

The most common allegations of misrepresentation include:

  • Medical History
  • History of Tobacco or Drug Use
  • Financial Background
  • Criminal Background (Arrests or Convictions for Serious Offenses)

Agent Negligence Causing an Error or Omission on the Application

We have gotten many client beneficiaries paid when their claim was denied because the insurance agent made a mistake completing the insured’s initial application for insurance. The life insurance company will deny beneficiaries’ claims due to alleged fraud, when the mistake was in fact the agent’s.

Claim Denied Due to Nonpayment of Premiums

When the life insurance premiums are not paid, the policy will lapse and terminate. However, we have gotten many beneficiaries paid under these circumstances because the fault is frequently not the insured’s.

When you buy a life insurance policy, the insurance company’s obligation to pay out is contingent on the policyholder having paid the premiums. Life insurance may not pay out due to nonpayment of premiums.

If you forget to pay, the insurance company will typically provide a “grace period” for making late payments of around one month from the due date. If you do not pay within the grace period, the policy will “lapse,” and you will no longer be covered. Even if you’ve been paying diligently for decades, your policy can be terminated after missing one premium payment.

Lapse in coverage because employee stops working and employer stops paying premiums

Sometimes policy lapse and termination happen through no fault of the insured. For example, if ERISA controls, there are many safeguards in place for an insured who does not receive the required notices and application for conversion from their employer, and their employer simply stops paying premiums on their behalf. Beneficiaries can get paid even if the policy lapsed in these circumstances!

Lapse in coverage because the employee went on disability and the coverage ended

Again, there are notices that the employer is required to provide an employee if the employee is out of work on disability. The employer may not simply stop paying premiums.

Death Due to Extreme or Dangerous Activities

So-called “Accidental Death & Dismemberment” policies (AD&D) are commonly sold under the impression that if the insured dies of a non-natural, “accidental” cause, a death benefit will be paid to his or her beneficiaries. However, it is common for accidental death insurance claims to be denied.

Insurance companies often define “accident” in an arbitrarily specific manner, in which long lists of provisions must be satisfied before they agree to pay out. For this reason, companies will frequently base their denial on evidence surrounding the circumstances of the insured’s death. It should be noted that AD&D policies never cover suicide or health-related deaths, since both of these scenarios would not qualify as an “accident.”

We recently settled a matter where the insured died from severe injuries he sustained in a motorcycle accident, several weeks after the accident. Our client’s claim was initially denied based on “acute amphetamine intoxication” and benzodiazipine use, although no medical history was available, no autopsy was ever performed, and the medical examiner never viewed the body.

We argued that the insured’s cause of death was the injuries sustained from the accident, having nothing to do with drug use, that forseeability of the accident is legally irrelevant, and that even deaths resulting from negligence (taking drugs then driving) may still be an accident. We got our client paid!

Death During First 2 Years of Life Insurance Policy

In most states, the first two years of a life insurance policy are considered the “contestability period,” i.e., the period of time during which an insurance company can review and fact-check information on a life insurance application (see our previous blog post about what happens when someone dies shortly after getting life insurance).

If the insured dies during the contestability period, the company will do a full investigation of the individual’s medical records as well as any other information requested on the application.

This means that if there were any misrepresentations, falsities, or omissions on the application, the insurance company may retroactively cancel the policy and refund premiums instead of paying the life insurance claim. This is an extremely common tactic among insurance companies, even when the misrepresentation in question is unrelated to the insured’s death. All too frequently, life insurance claims are denied due to a mistake on the application.

For example, we got our beneficiary client paid in full when the insured died within the contestability period of heart failure.  We argued that the insured had no history of heart failure and therefore could not disclose that.

You should also know that most life insurance policies contain a two-year “suicide clause,” in which claims can be denied in the event of a policyholder’s suicide.

This is meant to deter people from buying policies with the intention of committing suicide shortly afterward, thereby leaving large life insurance benefits for their family members. However, suicide is not always clear-cut, and life insurance may not pay out when there exists a mere possibility of suicide.

An insured should always disclose any past or present health conditions, surgeries, and medications, as well as lifestyle habits such as previous or current smoking, drug use, or alcohol use.

Claim Denied Because the Insured Died Abroad

A policy may specify that if you die while living outside the United States, that is an exclusion that results in claim denial. Be sure to inspect your policy for this exclusion if you plan to live abroad.

If you die while traveling abroad, the insurance company may delay paying on your beneficiary’s claim while they investigate.

Claim Delayed or Denied Due to a Problem with the Beneficiary

Insurance companies invariably deny claims when there are one or more of the following problems with the beneficiary:

  • Beneficiary dispute
  • There is no beneficiary designation on file.
  • The beneficiary was changed after a divorce.
  • The beneficiary of the policy is a minor.
  • The insured did not name a spouse as a beneficiary in a community-property state.
  • The life insurance policy was included in a will or willed to an estate.
  • The beneficiary was not updated after a significant life change.
  • The beneficiary is not a specific person, such as “children” or “relatives.”
  • The insured named only a primary beneficiary and no secondary beneficiary

Claim Delayed or Denied Because the Death was a Homicide

In most cases, life insurance policies should pay out in the event of homicide. However, there are specific circumstances in which insurance companies could deny a beneficiary’s claim in the event of the insured’s murder.

For instance, if the beneficiary is under investigation for the homicide of the insured, then the beneficiary will not receive the death benefit until cleared of any involvement in the insured’s death. Additionally, life insurance companies will rarely pay out if the insured was murdered while participating in unlawful/criminal activity.

We had one case where the insured was murdered. The insured was a drug user, and the beneficiary’s claim was denied based on misrepresentation. We successfully argued that the agent did not probe into the insured’s drug use, that the insured was never asked whether he was treated for drug abuse, and that drug abuse had nothing to do with the cause of death. Our client was paid in full.

If Your Claim For Death Benefits was Denied, Do Not Take No for an Answer!

If you believe your life insurance or AD&D claim has been unlawfully delayed or denied, don’t hesitate to contact an experienced life insurance beneficiary lawyer for a free case evaluation. We get our clients paid!

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Misrepresentations and cause of death in life insurance applications

Can Life Insurance Companies Deny a Claim?

At first glance, life insurance seems like a fairly simple process. The policyholder applies for insurance with a specified death benefit, and, after he or she dies, the beneficiary or beneficiaries will receive this benefit in full. However, this is not always the case.

Insurance companies will frequently deny benefits to claimants due to misrepresentations during the policy’s contestability period.

The Laws Governing Insurance Vary From State to State

Each state has unique laws limiting the insurance company’s ability to rely on misrepresentations on the application to avoid liability. Typical statutes require some combination of three main elements: intent, materiality, and relation to the insured’s cause of death.

An Insurer Must Prove “Intent to Deceive”

Some states provide that an insurer cannot deny claims unless they prove that the misrepresentations were made with the “intent to deceive” the insurer. This means that the policyholder intentionally lied while filling out the application for life insurance.

For instance, Alabama Code §27-14-28 states that no “misrepresentation … under any insurance policy shall defeat or void the policy unless such misrepresentation is made with the actual intent to deceive as to a matter material to the insured’s rights under the policy.”

If an insurer voids an Alabama policy due to misrepresentations on the application, they must prove that these misrepresentations were knowingly and willfully made.

What is Material Misrepresentation on an Insurance Application?

Most states require that a misrepresentation be “material” in order to void a policy and deny a beneficiary’s life insurance claim. Within the context of life insurance, this means that the misrepresentation must have substantially affected the insurer’s decision to issue the policy in question. If the misrepresentation was “immaterial,” or did not affect the insurability of the insured, then the policy cannot be voided.

For instance, California Insurance Code § 359 allows insurers to “rescind the [insurance] contract” provided that “a representation is false in a material point.” The materiality of specific misrepresentations is hotly contested between denied claimants and insurance companies.

Misrepresentation Must be Relevant to Cause of Death

Five states (Kansas, Missouri, Nebraska, Rhode Island, and South Carolina) provide that misrepresentations cannot void a life insurance policy unless they “contribute” to the insurer’s “loss.”

For instance, Neb. Rev. Stat. § 44-358 dictates that the “breach of a warranty or condition in any contract or policy of insurance shall not avoid the policy nor avail the insurer to avoid liability, unless such breach shall exist at the time of the loss and contribute to the loss.” This means that a connection must exist between the misrepresentations in question and the insured’s cause of death (which leads to the insurer’s “loss”).

For instance, if the insured neglected to mention a diagnosis of diabetes when applying for life insurance but died in an automobile accident, the insurer could not legally void his policy due to the misrepresentation of diabetes.

Insurance companies will frequently deny claims based on misrepresentations that were not material to their risk, made without the intent to deceive, or irrelevant to the insured’s cause of death. For example, our client’s claim was denied when the insured died of COPD. We showed that the insured was never diagnosed with COPD, therefore there was no intent to decieve. WE got out client paid. Another client’s claim was denied due to “incorrectly answered questions” on the application. The insured died of natural causes, therefore, there was not only no intent to deceive but the insurer could not show that any errors on the application were material to their risk. Again, we got our client paid.

If the Misrepresentation Was Made By The Insurance Agent, the Beneficiary Can Get Paid

We have seen many, many cases where the application was filled out incorrectly by the insurance agent, despite the insured giving the agent correct information, and the claim was denied.  As a general rule, anything the agent knows is imputed to the insurance company, so the insurance company cannot deny a claim based on misrepresentation under these facts.

If your claim has been unjustly denied or delayed due to alleged misrepresentation, don’t hesitate to ask an experienced life insurance lawyer to evaluate your case.

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What happens if someone dies shortly after getting life insurance?

In short, the beneficiaries’ claims are more likely to be denied.

A life insurance company is contractually obligated to pay the specified death benefit regardless of when the loved one dies, whether it is four months or forty years after the policy takes effect. While the purpose of a life insurance policy is to provide coverage in the event of a loved one’s unexpected death, if the insured dies within a year or two of obtaining or increasing their insurance policy, the company will look for reasons to avoid paying the claim. This is especially likely to happen if information on the initial application was inaccurate or if it looks like the insured may have committed suicide.

If your life insurance claim was denied, we may be able to help you. Call us for your free, no-obligation case evaluation.

Do life insurance companies check medical records after death?

Yes. The insurance company will look for undisclosed medical conditions and also investigate the facts the insured set forth in the application for life insurance. If they find any discrepancies, your claim for death benefits will be denied.

The Contestability Period

The contestability period is defined as the amount of time during which an insurance company can review and fact-check information on a life insurance application. If the insured dies during the contestability period, the company will do a full investigation of the individual’s medical records as well as all of the other information requested on the application.

If any medical information was left off the policy application, the insurance company will have grounds for denying a claim or reducing the death benefit. They are only obligated to pay out if all the information made on the policy application was completely accurate. If there were any misrepresentations or falsities, they will invalidate the policy and refund premiums instead of paying the full death benefit.

For this reason, generally, claims in which the insured passed away during the contestability period have a significantly higher chance of being denied than they would after the period expires. Although the length of the contestability period varies (e.g. Missouri is one year), it is two years in most states.

Although it may be frustrating to policy owners and beneficiaries, the contestability period makes sense from a legal perspective. Say you were diagnosed with a terminal illness and decide to take out a valuable life insurance policy so that your relatives can benefit upon your inevitable death a few months later; on the application, you fail to mention your diagnosis such that the insurance company has no idea of your actual condition.

Know that life insurance companies also use the contestability period to their advantage; if the application asked the applicant to state any diagnosis of an anxiety disorder in his or her lifetime and the insured failed to mention a childhood diagnosis of OCD, the beneficiary’s claim can still be denied even if the alleged misrepresentation has little to do with the insured’s cause of death.

The Suicide Clause in Life Insurance

It may seem morbid, but most life insurance policies contain a provision, or “suicide clause,” in which claims can be denied in the event of the policyholder’s suicide.

The suicide clause is meant to deter people from buying policies with the intention of committing suicide shortly afterwards, thereby leaving large sums of life insurance benefits for their family members. This clause generally applies during the aforementioned “contestability period,” so if the policyholder commits suicide more than two years after buying the policy, beneficiaries are still entitled to the death benefit.

It is important to note that AD&D policies never cover suicide, which by definition cannot be considered an “accident.”

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.

Was your life insurance claim denied because the insured died during the contestability period?

If a policyholder dies shortly after buying life insurance, the insurance company has more freedom to contest/deny the beneficiary’s claim. Consequently, it is all the more important to contact an experienced life insurance beneficiary lawyer if your claim has been unjustly delayed or denied. Call us if your claim has been denied because the insured died within the contestability period – we get our clients 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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