Why Would Life Insurance Be Denied – Life insurance is often purchased to ensure the beneficiary has some financial means if the policyholder passes away. A life insurance policy promises to pay the beneficiary in a timely manner upon proof of death and in compliance with the terms and conditions of the contract.
However, because insurance companies do not want to pay out more than necessary, they will look very carefully at the death of the policyholder and try to determine if there is a way to avoid paying life insurance benefits. longevity or not.
Why Would Life Insurance Be Denied
Life insurance companies are highly regulated in Texas and must evaluate claims in good faith and treat claimants fairly. When companies unfairly delay or deny legitimate requests, beneficiaries have the right to challenge those decisions.
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Companies have the right to refuse to pay life insurance benefits if the policyholder or beneficiary does not meet certain policy conditions. When a life insurance company denies a claim, it is usually for one of the following reasons:
Speaking with an experienced life insurance attorney can help you understand the details of your denial and pursue any opportunities to appeal the decision.
Life insurance policies in Texas have a two-year dispute period. That means if the policyholder dies within two years of purchasing the life insurance policy, the issuing insurance company has the right to investigate the circumstances of the death and may refuse to pay benefits.
The competitive window is intended to give insurers the opportunity to detect fraudulent claims. There is also a standard exclusion in life insurance policies that denies coverage if the policyholder dies by suicide during the disputed period. Life insurance claims may also be denied if it is discovered that the policyholder has provided inaccurate information in the insurance application.
Just Got Denied Life Insurance
Once the dispute period has expired, the only way the insurer can lawfully refuse to pay benefits other than nonpayment of premiums or existing policy exclusions is to show the policyholder knowingly providing false information that is material to the underwriting of the risk.
The important facts regarding life insurance would be the personal information requested in the life insurance application. Risk is assessed based on the answers given. If information is provided incorrectly, the appropriate premium will not be calculated and risks may be underwritten that would not otherwise qualify for coverage.
The law further provides that a life insurance claim cannot be denied based on a misrepresentation in the application after the two-year dispute period unless the misrepresentation is:
The specific requirement that the misrepresentation be designed to invalidate a life insurance claim after the period of dispute has led some insurers to believe that misrepresentation during the period of dispute is only necessary for with risk to deny life insurance claim.
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The Texas Supreme Court recently clarified the issue of an applicant’s intent when making false information in a life insurance application in an opinion published on April 28, 2023 :
“Respecting our precedent, we therefore hold that insurers must plead and prove fraudulent intent to avoid contractual liability based on misrepresentation in an insurance application. life insurance, whether the contract is contestable or not.”
Therefore, a life insurance claim cannot be denied at any time due to misrepresentation in the insurance application unless it can be proven that the misrepresentation was made with intent to deceive. The insurance company issues the contract.
Texas law allows life insurance companies to settle life insurance claims for less than the face value of the policy when the policyholder’s death occurs in any of the following ways:
West Palm Beach Life Insurance Claim Denial Lawyer
Occupations considered hazardous and prohibited aviation activities must be clearly stated in the policy.
When a life insurance claim is made, it means someone has passed away, and often family members are still struggling with their loss when they receive a claim denial. claim compensation. The insurer’s actions could cause further suffering during these already difficult times. The beneficiary can usually appeal the insurer’s decision but will have to provide further evidence to get the insurer to change its position.
Insurers must provide written reasons for denying coverage. If the reason for refusal is non-payment of premium, the insurance company may have the right to refuse coverage. Similarly, if the cause of death is excluded under the terms of the policy, the insurer may have good reason to deny the claim. Challenging these denials requires a detailed investigation of the circumstances and the assistance of an experienced life insurance claim denial attorney.
Asking a policyholder to misrepresent information in an insurance policy is a common reason given by life insurance companies when denying claims. But to avoid paying a life insurance claim, the misrepresentation must be both material (related to the underwritten risk) and intentional (wanting the insurer to rely on false information). ).
Delayed/denied Life Insurance Claim Insurance Dispute
Proving the mental state of a person who is not available for questioning can be difficult for an insurance company, and the evidence must be convincing for a court to rule in favor of denying payment of life insurance benefits. longevity.
Courts and juries do not like insurance companies that try to avoid paying covered claims. Unless the misinformation would have caused the insurance company to deny the risk in the first place, the life insurance benefit will likely be paid out less than any additional premiums that would be payable if the company insurance has accurate information when assessing risk.
Life insurance proceeds are often needed to provide for surviving family members. Delays and refusals by insurers may cause unnecessary hardship and may indicate that the insurer has acted in bad faith.
A Houston insurance litigator whose practice helps beneficiaries whose life insurance claims are denied know how to investigate the reason for the denial and obtain the information needed to convince an insurance company Pay legitimate life insurance claims without further delay. Contact us today and learn how Berg Plummer Johnson & Raval, LLP can help resolve your denied life insurance claim.
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The attorneys at Berg Plummer Johnson & Raval, LLP are committed to helping people receive the disability insurance benefits they deserve.
When you consult with Berg Plummer Johnson & Raval, LLP, an experienced Houston litigator at our firm will engage you in a collaborative partnership. We understand the unique challenges associated with business and insurance disputes and how to resolve them successfully and in a manner that accomplishes our clients’ goals. Our practical, results-oriented mindset drives every aspect of our legal representation. We are laser-focused on achieving the best possible solution for each customer. Death is inevitable, but the impact of the death of the sole breadwinner can devastate the family, both emotionally and financially. Emotional loss is irreversible and only time can heal. But a good financial plan can minimize the impact of someone’s unexpected death. A wise person should always think and plan, how my family can continue to have the same, if not better, lifestyle that they are used to, after I pass away. He/She simply chose a good life insurance policy to compensate for the financial support he used to give before his death. It is common to see insurance companies denying life insurance claims. Insurance claims can be denied for many reasons. Everyone should know some facts to reduce claim rejection by insurance companies.
We must know that Life Insurance works on the concept of “Best Trust”…..in simple terms It means…proper disclosure from both the customer and the insurance company. Hiding even seemingly trivial information can lead to claim denial. For example, people often hide their smoking and drinking habits when filling out applications, while purchasing term insurance premiums almost double when a smoker takes out a policy against a non-smoker. smoke. In the event of death where actual information is disclosed, the claim will be denied. All brief and detailed information such as age, height, weight, occupation, and income must be accurately declared. Some people even cite increased income to receive higher death benefits. It is very important to be honest and alert while applying to save your family from unnecessary hardships.
Pay insurance premiums regularly. The policy in effect only guarantees death coverage in the event of death. The company refused to claim compensation when the contract became invalid due to failure to pay insurance premiums on time. Nowadays, insurance companies remind you of various methods of premium payment notification such as phone call, SMS, Whatsapp, E-mail, etc. You should not arbitrarily pay insurance premiums. Insurance companies also offer a grace period, which in most cases is 15/30 days. If the policy lapses, all the premiums paid will be wasted and there is no chance of getting it back. In case of real financial hardship, one can opt for the prepayment option to get reduced death cover.
Life Insurance Claim Denied… What Are My Legal Options?
The person nominated by the policy owner will receive all benefits of the insurance contract. While purchasing one or more nomination files is a task. The insurance company may reject a claim if the nominee’s details have not been filled in or are available
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