Although life insurance is an important benefit for many people, it is not always easy to receive the benefits you expect from the insurance company. In fact, many claims are denied for a variety of reasons.
Understanding some of the common causes for life insurance denial can help you avoid these problems to make sure your survivors get the benefits they deserve.
Common causes for denial
Employer-provided life insurance carriers deny their policyholder’s claims for several reasons, including:
- Small print: A recent report from Law Street news online explains a current lawsuit regarding a denied life insurance claim. This is but one example of insurance carriers denying a claim based on the technical language of the insurance contract. But this happens all the time. It is critical to read and understand your policy.
- Misrepresentation: Often an insurance provider will deny claims based on an accusation of misrepresentation on insurance applications. Most commonly these misrepresentations involve tobacco use.
- Medical history: Certain types of medical ailments or situations can result in denial of a claim. In most cases, these medical situations coincide with the misrepresentation issue above, but some medical situations can result in denials.
- Failure to pay: If there are gaps in payment in insurance premiums, these can result in lapse of coverage. If the insured dies during the lapse of coverage, there will be no coverage.
There are more reasons for denial of a life insurance claims. Many claim denials are legal and totally within an insurance provider’s rights. However, sometimes a valid claim is denied. In these cases, it is critical to talk with an experienced insurance lawyer about your rights and options. You deserve to receive the benefits you have paid for, but sometimes you cannot get those benefits without a legal fight.