A denied life insurance claim can feel like a slap in the face. While some denials are legitimate, many are at best loopholes and at worst deceitful. Want to make sure that you or your loved ones aren’t denied your life insurance claim? Take a look at these six reasons it happens.
Failure to Pay Premiums
Life insurance policies are usually only effective if you pay the premiums every month. If you miss a payment, your policy could lapse, leaving your family without compensation in the event of your death. Insurance companies often use missed payments as a reason to not pay on a claim, though you do have some recourse if your claim is denied. For instance, if the insurer did not send their notices to your correct address, or even if the notice did not clearly state that the policy was at risk of lapsing, you could still be entitled to compensation.
Life insurance policies often contain exclusions. These exclusions lay out circumstances that are not covered by the policy. The insurance companies take great care when drafting these exclusions because they want the language to be vague enough to cover many different scenarios. A denied life insurance claim could be because of one of these exclusions.
No Designated Beneficiaries
Not naming a beneficiary for your life insurance policy can cause delays to a payout or even a claim denial. In some instances, after being delayed, your claim could even end up going to the wrong person. Be sure to check whether you’ve designated the beneficiary of your choice, and update your policy when things change.
Misrepresentations on Policy
When you apply for an insurance policy, the insurer requires that you answer certain questions about your life truthfully. For instance, a policy application may ask about your weight, health, income, hobbies, and other details from your life. The reason for these questions is to ascertain how high of a risk you are, which affects how much you can be insured for and how high your premiums are going to be. Answering any of these questions untruthfully could lead to a denied life insurance claim.
Inadequate Information from Employer
Many employers offer their employees group life insurance coverage as a benefit. The employer may pay the premiums or deduct the premiums from your paycheck, but no matter how the premiums are paid, sometimes the employer does not provide their employees with a copy of the policy. In such cases, you might be denied a claim because you were unaware of certain requirements for eligibility. For this reason, it is critical to ask for documentation of a group life insurance policy if your employer offers one.
There are many instances in which you might want to change a beneficiary for your life insurance policy. For example, a grandparent might tell their family that they are adding their newborn grandchild as a beneficiary. If that grandparent dies before completing the paperwork, that grandchild will be denied.
Talk to Us about Your Denied Life Insurance Claim
Do you think you have a legal right to a life insurance payout but are being denied your claim? Talk to Pacin Levine Attorneys at Law today to discuss your options.