Why Life Insurance Claims Get Denied

Life insurance policies are a mixture of creating a safe and comfortable living situation for family and friends, and a gloomy preparation of what will unfortunately come. But creating a safe and comfortable living situation for family and friends could also lead to an area of obscurity. Your life insurance policy should prepare for the future, not wreak havoc on it. So why do insurance companies deny what you’ve worked so hard to prepare?

Misstatements In A Life Insurance Policy

Let’s say that when you were completing your life insurance policy, you completely forgot that diabetes is common among your mother’s side of the family. Do you think that your life insurance policy should be denied for your family members if your death had absolutely nothing to do with a diabetes incident? Or what if there was a health condition you didn’t include on your policy because you were unaware of it, yet your loved ones were denied the promised amount money. Of course you’re thinking there’s no way that anyone would allow this to happen to your loved ones, but the truth of the matter is this happens all the time. And here’s the proof! This is an actual reason for denial that insurance companies often use- Failure to Disclose Unknown, Incorrect, or Unofficial Medical Diagnosis on Application for Insurance. If your medical diagnosis is unknown, how can you include it on your application?

Any kind of misrepresentation on a policy can cause an insurer to deny loved ones what they are owed. Just know that you can fight this, especially if that policy or an insurance agent was unclear and thus could’ve led the deceased to make mistakes and accidental omissions from a policy.

Lapse In Payment

An insurance company denied a life insurance policy saying that there was a lapse in premium payment, which seems like a legitimate excuse for denial. However, the deceased was never notified that the insurance company didn’t receive the payment or he or she was told when they signed the policy that the company allowed grace period when accepting payments.

Don’t think that you can’t dispute this for your deceased loved one. The insurance company needs to have proof of trying to contact the deceased person about missing payments and documents plainly stating that an insurance policy can be denied due to lapses in payment.

Accidental Death and Confusing Exclusions 

Ambiguous language can be found in every insurance policy, that may be why so many people have complications with them. Insurance companies can deny an accidental death life insurance claim merely by stating that the death wasn’t accidental- even if both a medical examiner and a death certificate state that the death was accidental. They may claim the death was due to negligence, a health issue or self-inflicted, all to get out of paying your family what they’re deserved.

If insurance companies haven’t clearly stated exclusions on accidental death or any other exclusions in the issued policy previous to a death, you have a fair fight.

Don’t be denied or payed less than what you are owed because of your insurance companies dodging tactics. If an insurance policy of a loved one has been denied for any of these reasons, call The Byrd Law Firm today at (713) 864-3000.