Why Do Life Insurance Companies Deny Claims?

The top five reasons that life insurance companies deny claims, as we have seen over the last ten years.

1.  Misrepresentation in the Application.  This is the misrepresentation, rescission, rescind, legal move of the life insurance company.  If your loved one passes away in the first two years of the life insurance policy, no matter the cause, the life insurance company will investigate their background like you can’t believe.  The life insurance company will get medical authorizations from you.  The company might hire investigators, to really dig into the material.  The insurance company will get every medical record they can, for the last five, ten, even twenty years ago.  They will closely compare everything in those years of medical records, with every answer to every little question on the medical questionnaire part of the application.  If they can find anything, no matter how small, that does not match up just right, they will rescind the policy.  That is a fancy legal move for denial by sending you back the premium paid.  Many times, people are too distressed about losing a family member to even understand what move has been played on them.  Better to talk to us, the sooner the better, we can help avoid this sad result.

2.  Premium not paid on time/Policy Premiums were Not Paid.  Many times, a person will get ill, unable to care for themselves, or handle the details, like paying the bills, or working, or reading all the mail or email.  If a payment is due on a life insurance policy, even if the person is sick, then passes away, the life insurance company might use non-payment as a reason to terminate the policy.  If the policy is not paid-up to be in force, the life insurance company might not pay your claim.  California has strong state regulations that require certain notices before a life insurance policy is no longer in force.  Sometimes, these very large companies do not want to follow “every” California law and regulation, and even if they have told you that the policy is terminated, and they won’t pay, they might still have to pay your claim.  We can help.  We really know the laws and regulations, and we will push so hard to get your claim paid.

3.  You’re not the beneficiary.  Sometimes, the life insurance company says they won’t pay, because they don’t think you are the beneficiary.  This can be a big problem, especially if the life insurance company goes ahead and pays the wrong person.  It is so important to protect your rights with the life insurance company if the company is about to pay the wrong person.  Determining who is the correct beneficiary takes a careful review of the facts and the policy.  Don’t let the life insurance company rush to pay the wrong person, leaving you without the benefits.

4.  Excluded Cause of Death.  Not to be grim, but life insurance companies really like to know exactly why and how a person died.  Many times, a life insurance company will try to determine this just from the death certificate, without getting any additional information.  This can be very important to whether the policy benefits are paid, or not.  Typical life insurance policies have lots of exclusions in them.  Exclusions are the legal fine print, that excludes payment for certain causes of death.  Depending on the policy, and the evidence, this can be anything from rock-climbing to driving while under the influence, or even the lack of a safety belt noted as used in a police report.  These details can be very important, and depending on the exact real facts, the policy may or may not be owed.  You and your family need us on this right away, as soon as possible, to hire investigators, preserve evidence, be able to show the true facts, so you get paid.  Getting all the true facts takes skill and experience, to know what matters, and how to show it to the life insurance company.

5.   Accidental Death/Suicide Exclusion.  Similar to the excluded cause of death, some policies provide for only accidental death coverage.  Other policies have higher benefits available if the cause of death is an accidental death, versus illness or other cause.  Still, other policies exclude suicide, or exclude suicide for the first two years, or are too vague about what might be a suicide.  These cause of death cases can be far too morbid for a family member to deal with.  But with our investigator’s background, and determination, we can work hard to find out the true facts, and be able to present those facts to the life insurance company, so your claim is paid.  This diligence in the investigation, and a lawyer’s eye for presentation, and our years working for insurance companies, seeing how they actually weigh whether or not to pay a claim, can make all the difference in getting your claim paid.