GUIDE FOR LIFE INSURANCE CLAIMS©
By: Mark Wolfe, Attorney at Law
Boteler Richardson Wolfe – Injury Lawyers*
mark@brwlawyers.com
*The firm handles denied life insurance claims in Alabama, Mississippi and Florida
While most of us hope that a life insurance claim arising from the death of a loved one will be a simple and hassle free process, the fact is some life insurance claims are initially denied. These denials 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 wrongly. This guide will help you with some basic information about life insurance claims and locating policies. Then it reviews common reasons why life insurance claims are initially denied and concludes with important information for claimants if the claim is denied. Note from the author: If you are reviewing this publication or link during a time of loss, please accept my condolences and sympathy for your loss. I pray that you find comfort and understanding for your loss and that the passage of time will replace the sorrow of your loss with the joy and blessing of the memories of your time shared together. – Mark
I. THE FIRST STEP
Notify the Company of the Claim. While this is a very basic step it can be a little difficult if the policy is older. Mergers and acquisitions of life insurance companies can make locating the correct successor or remainder company a little difficult. However, internet searches can usually help you quickly identify the correct company name and location for claim notification. Also, many life insurance agents or attorneys who handle life insurance claims have this information available or access to the correct resources to help identify where and how the claim should be submitted.
What You Need to Do. Once you’ve contacted the company you must complete the claim form. Many of these claim forms can now be downloaded from the company’s web site. At the very least you will have to submit a copy of the death certificate and the company may require additional records related to the claim. Always reference the claim number or policy number (or both) on all documents or material submitted. 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. (IMPORTANT: Please make sure to read more about appealing a denial below.)
II. LOCATING OTHER LIFE INSURANCE POLICIES
Locating Additional Policies. It’s a fact, many life insurance benefits go unclaimed because beneficiaries do not realize a policy exists. Below are some tips for locating additional life insurance policies.
1. Review the deceased’s check book or bank statements looking for premium payments.
2. Review the deceased’s tax returns for the last several years to see if interest or cash dividends from a life insurance policy were listed. There should be a corresponding 1099-INT from the life insurance company. These payments will be reported directly on form 1040, 1040A and 1040EZ or on Schedule B if an itemized tax return was filed,
3. Contact the decedent’s employer and/or former employers to see if any type of life insurance was offered through the company’s group benefit programs and if the decedent purchased a life insurance policy or was provided a life insurance policy through employment,
4. Review all disability policies for the decedent to see if death benefits are also provided,
5. Review any known life insurance policy to see if additional benefits such as double indemnity for accidental death may apply,
6. Check with the decedent’s auto insurance company or homeowner insurance company. Many of these companies will also offer life insurance policies for their customers,
7. Check with the decedent’s bank or financial institutions to see if life insurance benefits or policies were offered in connection with a checking or savings account or in connection with a brokerage account.
III. DENIAL OF LIFE BENEFITS AND APPEALS
Many times if a basic life insurance claim is denied, it is done so based upon a process known as “retroactive underwriting.” This usually occurs if the insured dies while the policy is the “contestability” period (usually 2 years from date of issue). 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 affected the underwriting risk associated with issuing the policy. Simply put, the company must be able to legitimately argue that “but for” the undisclosed prior medical condition, the policy would not have been issued or the rates for the policy would have been significantly different. The issue of “material risk” is a complex issue that is often legally debatable.
Accidental death or double indemnity 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. Terms like “sole and only proximate cause of death” often involve complex medical and legal analysis but give the company a very legalistic sounding reason not to pay.
BEFORE YOU FILE AN APPEAL OF A DENIAL OF LIFE INSURANCE BENEFITS. 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 decision to deny benefits. Yet many times claimants are unaware of the potential consequences of simply “appealing” the denial without knowing the exact appeal protocol set forth in the policy. 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 plan, the failure to comply with the appeal requirements can be extremely detrimental. In one recent example a Federal Court determined that the claimant’s failure to submit any “new evidence” during the appeal process provided for in the plan, precluded the claimant from presenting that new evidence at trial. [See Hancock v. MetLife, 590 F.3d 1141 (10th Circuit 2009).]
NOTE: 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.
IV. CONCLUSION
While life insurance claims should be simple and easy, they can often times become arduous and legally complex. The simple fact is insurance companies do not like to pay claims and have tremendous resources to fight claims. With many claimants of life insurance benefits in a state of grief and mourning, the insurance company knows it has the upper hand and this often results in the wrongful denial of life insurance benefits. If you believe your claim for life insurance benefits has been wrongfully denied, please consider consulting with an experienced attorney who knows and understands this area of the law. Boteler Richardson Wolfe consultations are free: call 251 410-7761 to speak directly with Mark Wolfe or send him an email: mark@brwlawyers.com (include “Life Insurance” in the subject line.) * Prosecuting denied life insurance claims in Alabama, Mississippi & Florida
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