Denied Life Insurance Benefits

IMPORTANT INFORMATION ABOUT LIFE INSURANCE CLAIMS© By: Mark Wolfe, Attorney at Law insurance_claim_form_424While most of us hope that a life insurance claim arising from the loss of a loved one will be a simple and hassle free process, the fact is many life insurance claims are wrongly denied. The denial of life insurance benefits can be for many reasons. Some times the reasons for such a denial are legitimate, but many times they are wrong. In fact many insurance industry experts say that up to 40% of life insurance claim denials are done so improperly.  [IMPORTANT: If you are a beneficiary of a denied life insurance claim, please read the last section on appealing the denial of life insurance benefits.] Why are so many legitimate life insurance claims denied? Most life insurance claims adjusters recognize that many life insurance claimants do not question or challenge a denial of life insurance benefits. This means that if there is a “close call” on whether or not benefits should be paid, they automatically opt for denial first in hopes the claimants will just “go away.” Insurance companies often use legalistic terminology in their denial of benefits letter and may also reference complex medical terms or conditions.  These type of denial of benefit letters are so well crafted they often discourage beneficiaries from seeking legal advice or consultations about the legitimacy of the denial.  Our experience in this area of law has shown there are two common areas of life insurance benefit denial. These are “material risk” and “accidental death.” Material risk as a  reason for denial of life insurance benefits.  Many times if a basic life insurance claim is denied, it is done so based upon a process known as “retroactive underwriting.” This is a claim investigation technique that allows the insurance company to more fully and completely examine the deceased’s prior medical history. These prior medical records are reviewed thoroughly to see if the deceased left out or failed to disclose a pre-existing medical condition when completing the life insurance application. This “failure to disclose” is then used as grounds to deny the life insurance benefits. However, most claimants are not aware that such a denial must have materially effected the underwriting risk associated with issuing the policy.  In other words the insurance company must prove that “but for” the undisclosed medical information, they would not have issued the policy. The issue of “material risk” is a complex legal issue that is often debatable and framed by case law interpretation of that term and/or insurance regulations. The case law and regulations can vary from State to State. Read more here. Denial of accidental death or double indemnity life insurance benefits. Some companies issue stand alone accidental death life insurance policies or some standard life insurance policies have a “double indemnity clause” which pays twice the face value of the policy if the death is caused by an accident. Yet the policy language concerning the term “accidental death” is often drafted so vaguely that it gives the company lots of “wiggle” room to initially deny accidental death benefits. These type policies often have provisions or clauses that require the “accident” to be “the only cause of death without contribution from any other medical condition.”  They may also include vague activity restrictions at the time of death such as “strenuous or dangerous sporting events.”  Even when a death certificate lists cause of death as “accidental” many companies still try to use these vagaries in the policy to deny benefits.   BEFORE YOU FILE AN APPEAL OF A LIFE INSURANCE DENIAL. If you have questions about the denial of any life insurance benefits, make sure you fully understand your rights and obligations under the policy. Most life insurance policies allow claimants to file an appeal of the denial of life insurance benefits. Yet many times claimants are unaware of the potential consequences of simply “appealing” the denial.  They send a quick letter back to the company saying, “I appeal the denial of life insurance benefits.” Generally, once a company has denied the life insurance claim, the claimant has the burden of identifying specific reasons for the appeal and providing supporting documents or records to support the appeal. If the life insurance policy in question has been provided through the decedent’s employment or through a group, the failure to comply with the appeal requirements can be extremely detrimental. In one extreme example a Federal Court determined that the claimant’s failure to submit any “new evidence” during the appeal process precluded the claimant from presenting that new evidence at trial. What You Need to Do. Until the claim is paid in full: Keep copies of all correspondence and documents sent to the life insurance company. Keep all letters and material sent from the life insurance company. If a claim is denied, make sure you understand and comply with the requirements for an appeal. Also, if the claim is denied consider consulting immediately with an experienced life insurance claims attorney in your State. Note: Most attorneys who handle life insurance claims for beneficiaries do not charge for a consultation and work on a contingency fee (no benefits = no fees). Also, many times an experienced attorney can help resolve a denied claim before having to resort to filing a lawsuit. About the author: Mark Wolfe is recognized as one one of the Most Qualified Attorneys for Injury Victims and Insurance Claimants. He has represented numerous families in Alabama and Mississippi regarding denied life insurance claims with a 90% success rate. If you have questions about a denied life insurance claim, call him today at 1 866 975-7766 or e-mail him at and put Life Insurance in the subject line. Consultations are free and all claims and cases are handled on a contingency fee, meaning no recovery, no attorney fees.   Required Disclaimers:

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General Disclaimer: This information is posted for general information purposes to help those interested parties or persons with potential civil claims better understand their rights and potential causes of action. If readers are currently represented by an attorney on the subject matter of this post then they are encouraged to continue with said representation. No attorney-client relationship is established by this post.