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5 Reasons for a Life Insurance Claim Denial

Wed Mar 31st, 2021 on     Insurance Claims,    

Our Miami Insurance Claim Lawyer Is Here to Assist

If you’re the beneficiary of a life insurance policy and have had your life insurance claim denied by the insurer, then you may be entitled to challenge that denial by resubmitting a claim or by pursuing a lawsuit to secure compensation.

Life insurance claim denials are infrequent, but when they do occur, they can cause a great deal of anxiety. After all, the beneficiary might have been expecting to receive a payout, and the denial can put them in an incredibly vulnerable position from a financial perspective.

It’s important to understand that you need not accept the adverse decision of the life insurance company.  Though the insurer may have denied the application on one of several different bases, these justifications are not always supported by the facts of the case.

If you’d like to speak to an experienced Miami insurance claim lawyer (about the denial of what you believe to be a legitimate life insurance claim), we encourage you to contact our team here at Ver Ploeg & Marino, P.A.  We look forward to speaking to you about what you can do to obtain the benefits you deserve.

For now, let’s take a closer look at some of the reasons used by insurers to deny a life insurance claim.  Consider the following.

1) Misrepresentations on the Insurance Application

If the life insurance policyholder misrepresented the facts on their insurance application, the insurer could deny a claim made by the beneficiaries.  It’s worth noting, however, that the insurer may not investigate whether misrepresentations were made in the insurance application if the policyholder died more than two or three years after the start of the policy period (this amount may vary from policy-to-policy).

For example, suppose that the life insurance policyholder has misrepresented their age in the insurance application.  They die five years after purchasing said insurance coverage.  The insurer attempts to deny your claim (as a beneficiary of the policy), arguing that the policyholder misrepresented relevant facts — thus ending coverage.  You could counter this assertion by showing that it has been five years since the start of the policy, and as such, the insurer can no longer point to misrepresentations in the original application.

2) Death by Suicide

Not all deaths are covered by life insurance.  Most life insurance policies prohibit recovery of benefits if the policyholder died by suicide — but this prohibition only applies if the policyholder committed suicide within the contestability period for the insurance policy.  The contestability period is active for a short amount of time after purchasing said insurance coverage (typically two to three years after the start of the policy period).

Worth noting: accidents are typically covered by life insurance.  For example, if the life insurance policyholder is killed in a car accident, their policy would likely pay for their death (assuming no other denial-related factors are involved).

3) Policy Lapse

As the beneficiary, you are not the policyholder, so you do not necessarily have control over the policyholder’s behavior over the course of coverage.  It may be the case that the policyholder was not responsible with their payments.  If so, then the policy may have lapsed before the policyholder’s death, preventing you from receiving the benefits to which you would otherwise be entitled.

4) Beneficiary Wrongdoing

Many life insurance policies have exclusions for beneficiary wrongdoing.

For example, suppose that you are directly involved in the death of the life insurance policyholder. You were driving the policyholder but doing so recklessly — perhaps you were speeding well above the speed limit on the highway, resulting in a crash that killed the policyholder. Under these circumstances, you would be considered to have engaged in wrongdoing. Though you’re the beneficiary of their life insurance policy, the insurer would likely deny benefits, arguing that you are not entitled to benefits due to your misconduct.

5) Contingent Beneficiary Issues

Life insurance policyholders should account for the possibility that their primary beneficiary pre-deceases them.  Policyholders are generally given the guidance to select contingent beneficiaries — beneficiaries who will receive the life insurance benefits if the primary beneficiary dies before them.

However, in some situations, the life insurance policyholder may not have selected a contingent beneficiary or may have selected a contingent beneficiary who also pre-deceases them.  This can create distribution issues for the benefits.  If you believe that you are a contingent beneficiary, but the policyholder has not listed you as one officially, the insurer will likely deny your claim for benefits.  You’ll have to introduce documentary evidence proving that they intended for you to be the contingent beneficiary.  This can be rather difficult, and the insurer may find that such evidence is insufficient.  As such, it’s critical to consult with an experienced attorney for further guidance on how best to proceed.

Let Our Miami Insurance Claim Lawyer Help

Ver Ploeg & Marino, P.A. is an insurance litigation firm based out of Miami, FL, with several decades of experience advocating for policyholders in various disputes, including those that center around a life insurance claim.

Here at VPM Law, our team works closely with our policyholder-clients, helping them navigate their dispute’s unique challenges.  We have successfully resolved many cases involving life insurance beneficiaries whose claims have been denied, securing substantial compensation on their behalf.

Effective advocacy requires a willingness to take a case to trial.  At VPM Law, we have a deep bench of litigators willing and able to go to trial.  This approach allows us to exercise leverage during early negotiations.

If you’d like to speak to an experienced Miami insurance claim lawyer at VPM Law, we encourage you to contact us to schedule a consultation at your earliest convenience.  We look forward to speaking with you.

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