Claims filed by beneficiaries of life insurance policies are sometimes declined or denied due to various reasons. Denied life insurance claims worsen an already hopeless situation. Maybe the decadent was the breadwinner and the claim was your only hope. What legal recourse is available when a claim is denied?
The first thing should be to contact an attorney in Anchorage because the beneficiaries named on the policy document are entitled to compensation for the death of the insured provided premiums were fully paid. Unfortunately, most insurance companies take clients in circles until they give up on their claims that’s why the services of an attorney cannot be overlooked.
Consequences of Denied Life Insurance Claims
Life insurance companies should notify– by letter, email, or phone, beneficiaries if the life insurance claim is denied. A phone call should be followed up with a letter explaining why the claim was denied. The insurance company must quote the policy language and list the documents used to make the decision.
Beneficiaries should request a written copy of the notification containing the date when the decision was made and the reasons for denial of the life insurance claim. Also, beneficiaries should enquire if they can appeal the case. Most insurance policies allow beneficiaries to appeal life insurance claim denials.
Common Reasons for Life Insurance Claims Denials
The common reasons for life insurance claims denials can include, but are not limited to:
1. Policy lapse or cancellation due to missed premium payments;
2. A policy exclusion clause that bars or limits a claim;
3. Significant misrepresentation of facts on the insurance policy;
4. The policy was facilitated by an employer and it terminated after the employment ended;
5. An employer switched to another insurer;
6. The death of the insured was not covered by the policy.
Resolving Life Insurance Claims Denials
Most insurance companies provide vague reasons after denying valid life insurance claims. You should insist on a clearly defined letter that specifies and explains why the claim was rejected. Always remember you can appeal the decision, seek guidance on how to appeal such decisions. You might need documents such as the deceased’s medical records, death certificate, autopsy report, or a copy of their policy–particularly the premiums payment schedule.
The best way to increase your chances of success is to contact a competent attorney who specializes in life insurance claims to review your situation. Your attorney will need the denial letter, policy document, and others documents to evaluate your case and recommend an available legal solution.
Most life insurance policies are guided by the provisions of the ERISA of 1974 which require a minimum of one administrative appeal before a lawsuit can be filed by designated beneficiaries. Administrative appeals require cases to be based on facts with the support of the law. The administrative appeal makes way for court litigation even if the insurer upholds the decision to life insurance claim denial.
Most insurance companies approach life insurance claims intending to avoid, deny, or reduce the value of the claim as much as possible. Although some death claims raise eyebrows, most of the claims are genuine and valid. It’s important to involve a lawyer if the life insurance company engages in acts of bad faith, such as wrongfully delaying benefits and others.
Insurance claims lawyers ensure your rights are not violated by life insurance companies besides advising you what to do if an insurance company becomes unreasonable or starts acting up. Also, seeking justice while grieving the death of your loved one is not advisable and that’s why you need another person (a lawyer) to represent your claim.
Research shows that life insurance claim denial cases resolve faster when handled by a lawyer. First, insurance companies know that life insurance denial claims lawyers are experienced in such cases and they know what they’re talking about. Also, insurance companies fear messing with lawyers because they know litigation can be costly.
Insurance Bad Faith
Insurance bad faith occurs when insurance companies mishandle their clients’ intentionally–aiming to defraud them. Common acts of insurance bad faith can include:
1. Delaying investigation unreasonably and unjustifiably;
2. Failing to investigate a claim;
3. Citing false, fabricated, and unsubstantiated reasons when denying a claim;
4. Tricking and intimidating the claimant into accepting a settlement offer that is lower than the real value of the claim.
A claimant can bring another claim for insurance bad faith against an insurance company and recover damages for emotional distress, financial distress, and punitive damages.
Concluding the Claim
A life insurance claims lawyer can request all the documents related to your case and depose or issue a subpoena to the claim representatives of the insurance company. Alternatively, the lawyer can request an insurance expert to testify on behalf of their clients regarding insurance procedures and best practices.
Beneficiaries have a right to recover the full amount accruing in a life insurance policy as long as the deceased was faithful in paying premiums. However, it’s important to involve a legal expert to increase your success.
