While few people like to think about death, the fact remains that everyone will die at some point, and many people make plans for this eventuality and ensure that their loved ones will be provided for after their death. A life insurance policy can offer peace of mind in this regard, providing the promise that one’s family members will receive benefits after their death. However, it is important to be aware that insurance companies may deny life insurance claims for a variety of reasons, including:- Unpaid premiums - If a person fails to pay the premiums on their policy, the policy may lapse, and the insurance company may terminate the policy and deny any claims. However, insurance companies are required to send notice to a policyholder and provide a 30 day grace period before canceling a policy.
- Type of death - Some policies include exclusions for deaths that occur in certain situations. For instance, many policies exclude suicides from coverage for a certain period of time, and policies may also contain exclusions for a death which occurred as an act of war or when a person was participating in high-risk activities such as skydiving or mountain climbing. A claim may also be denied if someone died while participating in criminal activity.
- Health issues - Life insurance policies often contain a period of contestability, which is usually the first two years after the policy was initiated. If a person is found to have certain health issues, such as high blood pressure, after dying within the contestability period, the insurance company may deny the claim.
- Living outside the U.S. - Many policies only provide coverage if a policyholder is living in the United States at the time of their death.
The primary reason claims are denied is because of material misstatements made by a policyholder on their life insurance application. These types of statements may include incorrect or omitted information about a person’s health, including any chronic conditions, unhealthy habits (such as smoking), or other medical issues. To avoid the denial of a claim, it is important to be truthful on an application and provide complete answers to all medical questions.
Contact a Buffalo Grove Life Insurance Attorney
When your family has a life insurance policy, you expect to be able to receive the benefits from this policy in the event of a family member’s death. If your claim has been denied, the attorneys of Drost, Gilbert, Andrew & Apicella, LLC can help you understand your rights and work to ensure that you receive the benefits you deserve. Schedule a personalized consultation with an Arlington Heights insurance dispute lawyer today by calling 847-934-6000.
About the Author: Attorney Ken Apicella is a founding partner of DGAA focusing in the areas of personal injury, employment, insurance coverage disputes, and civil litigation. Ken earned his J.D. from DePaul University College of Law in 1999. He has been named a SuperLawyers Rising Star and a Forty Illinois Attorneys Under Forty to Watch. Ken has written and lectured for the Illinois Institute for Continuing Legal Education and regularly serves as a moderator at Northwest Suburban Bar Association's Continuing Legal Education seminars.
Sources:
https://www.nerdwallet.com/blog/insurance/life-insurance-policy-reject-claim/
https://www.truebluelifeinsurance.com/7-ways-life-insurance-will-not-pay-out/
https://www.protective.com/learning-center/life-101/important-facts/3-reasons-why-your-life-insurance-claim-could-be-denied/
Few things are as frustrating and confusing as a denied or reduced insurance claim payout – but did you know that you can dispute the decision? Additionally, consumers have certain rights, afforded to them by law, when dealing with their insurance companies. Learn more about those rights, and how an experienced