At least 5,000 life insurance claims are denied in the United States every year, and even more policies go unclaimed. People are usually surprised to discover that life insurance companies can delay or deny claims for many different reasons. In fact, most people believe that when an insured passes away, the beneficiary receives a payout immediately. Unfortunately, this is too often not the case. Like most businesses, life insurance companies are motivated by profit, having a strong financial incentive to collect premiums but later deny as many life insurance claims as possible, or to delay claims as long as possible.
If a life insurance company has failed to promptly issue payment of your life insurance proceeds, you may have a claim for breach of contract and bad faith insurance practices. Life insurance companies must investigate your claim within a reasonable period of time, usually within sixty (60) days of the claim being filed or in accordance with the life insurance policy terms. An insurance company may attempt to discourage you from hiring a life insurance lawyer by wrongfully delaying your life insurance claim, offering a reduced settlement amount, or making other efforts to avoid paying the full claim.
Some common tactics that life insurance companies will use to wrongfully delay your claim include but are not limited to the following:
Hospital Records/Medical Documentation Not Yet Received
Hospital or Medical Provider Refuses to Release Records
Failure to Provide Income Tax Returns
Failure to Provide Non-existent Medical Documentation
Independent Investigation Based on Suspicious Cause of Death
Independent Medical Review to Dispute Evidence
Beneficiary Dispute Based On Divorce
Beneficiary Dispute Based On Suspicious Cause of Death
No matter how badly you need the insurance proceeds, you should never accept a settlement offer without the advice of an experienced life insurance attorney. An offer to settle your claim for a reduced amount may indicate that the insurance company’s reason for delaying or denying your claim is illegitimate.
Failure to Disclose Immaterial Pre-Existing Medical Condition
Failure to Disclose Medical Appointments/Regular Check-Ups
Failure to Disclose Unknown/Unofficial Medical Diagnosis
Failure to Disclose Condition Requiring Future Treatment
Failure to Disclose Prior Alcohol, Drug, or Tobacco Use
Failure to Disclose Criminal History on Application for Insurance
Accidental Death Related to Independent Medical Condition
Accidental Death Actually Self-Inflicted
Accidental Death Not Occurring Within Specific Time/Date
Accidental Overdose Caused by Misuse of Medication
Policy Not Active Due to Death Occurring Prior to Effective Date
Policy Not Active Based on Period of Limited Activity Exclusion
Independent Investigation Based on Suspicious Cause of Death
Insufficient Evidence to Show Heart Attack
Independent Medical Examiner Disputes Evidence
Change In Health After Policy Lapse Due to Nonpayment
Change In Health Condition Prior to Effective Date of Insurance
Handwriting Expert Claims False Application Signature
Failure to Elect and/or Qualify for Employment Coverage
Failure to Convert Employment Coverage to Individual Policy
Insurance Company Not Responsible for Agency Errors
Insured Not Resident of United States on Date of Death
Failure to Properly Change Beneficiary
Policy Lapse Due to Depleted Cash Value
Law Offices of Heather D. Lee, Esquire 