Reasons Your Life Insurance Claim May Have Been Denied

Posted February 28, 2017

You regularly hear of health insurance and auto insurance claims being denied, but it is not often that you hear of a life insurance claim denial. After all, what argument would a life insurance company give to not pay out a claim upon a policyholder’s death? Unfortunately, some life insurance companies will cite any reason (valid or no) to not pay a beneficiary their benefits. While oftentimes illegal, because their denial is coated in legal terms, and because the letter may quote a law or two, individuals believe the insurance carrier’s decision to be just and do not think to fight the denial. If you received a denial letter from the deceased’s life insurance carrier, reach out to an Oklahoma bad faith insurance lawyer for immediate assistance in appealing the denial.

Reasons a Life Insurance Carrier Might Give for Denying You Your Benefits

1.     Material Misrepresentations on the Policy.

If the insurance company discovered information about the policyholder when reviewing the claim that was not originally available to them, they may deny the claim on the grounds that the policyholder misrepresented him or herself.

2.     Policy Lapse / Nonpayment of Premiums.

If the policyholder let his or her policy lapse prior to their passing, the insurance company is validated in denying the beneficiary their claim.

3.     No Beneficiary Designation.

The insurance company might stall paying out the benefits or deny a claim altogether if the policyholder did not name a beneficiary. While the insurance company cannot keep the benefits, claiming them will be a long and drawn out legal battle.

4.     Post Divorce Beneficiary Change.

In most divorce and child support proceedings, life insurance is discussed. More often than not, the judge will order each parent to keep the children as beneficiaries. However, sometimes a parent will go against the judge’s order and remove the children from the policy. If this occurs, and if the children try to claim their benefits upon their parent’s death, the court may have to become involved.

 

Additionally, if a previous spouse (one that the policyholder was divorced from upon his or her death) is still named as the policy beneficiary upon the policyholder’s death, he or she is not entitled to death benefits, despite the designation (Okla. Stat. tit. 15, §178) .

5.     Policy Exclusions.

Most life insurance policies include provisions that exclude certain deaths from being covered. Usually these exclusions are coated in legalese and worded in such a way as to encompass many possible scenarios which justify nonpayment. Additionally, many exclusions are ambiguous and, when included with other exclusions, cancel each other out. Still, insurance companies will try to use these to deny claims.

Consult a Bad Faith Insurance Lawyer

The bad faith insurance lawyers at The Bennett Law Firm can help you spot a bad faith insurance denial and file a lawsuit against the insurance company for more than your initial claim was worth. To recover the benefits that you are entitled to, call The Bennett Law Firm at 405-272-0303, or contact them online, to schedule your free consultation today.