Many of us pay monthly life insurance premiums with the expectation that our families will receive financial assistance if the unthinkable happens. Unfortunately, life insurance companies deny many legitimate claims. And too often, grieving families must hire a life insurance lawyer in order to get the benefits they deserve. It’s important to understand your rights before you file an appeal.
Understanding Your Life Insurance Policy
Most families believe that a life insurance policy will provide vital financial assistance if a breadwinner unexpectedly dies. However, life insurance companies are for-profit businesses. Their goal is to minimize their financial obligations, which often results in unfairly denied claims. It is important that you understand the terms and conditions of your life insurance policy before you file a claim or appeal.
The first step in understanding your life insurance claim is to review its written terms and conditions. While your official life insurance plan document may be too dense and technical to understand, the insurance company must also publish a Summary Plan Description (SPD) which provides an overview of your benefits, the claim and appeal processes, and other procedural rules. If requested, the insurance company must give you a copy of the SPD and your plan document.
Once you have a copy of the plan document and SPD, you should review the facts of your life insurance claim. To do this, you should request copies of your loved one’s medical records, death certificate, autopsy reports, and other information. This evidence can support your claim for benefits and clarify any confusion about your eligibility under the plan. An experienced life insurance attorney can assist you with this process.
Why Was My Life Insurance Claim Denied?
Life insurance companies deny life insurance claims for many reasons:
- Missing or insufficient evidence,
- Beneficiary disputes (where more than one individual files a claim),
- Alleged non-disclosure or misrepresentations (such as failure to report a pre-existing condition),
- Suicide or self-inflicted injuries,
- Substance abuse,
- A lapsed policy, and
- Ineligibility due to a policy exception.
If your claim is denied, you can file an appeal. However, you should consider hiring a life insurance attorney to assist with the appeal process, which typically involves a detailed legal and medical analysis.
Depending on your life insurance policy, you may also have an accidental death and dismemberment (AD&D) claim. Some life insurance plans include a rider that pays double if you are killed in an accident (as opposed to illness or old age). However, accidental death policies and riders typically include numerous exclusions and loopholes and are frequently disputed. If your policy includes an AD&D or “double indemnity” rider, you should contact a life insurance lawyer for further assistance.
Filing a Life Insurance Appeal
Life insurance appeal procedures vary, depending on who paid the policy’s premiums. If the life insurance is employer-funded, the federal Employee Retirement Insurance Security Act (ERISA) applies. If your personal life insurance claim is denied, you may have a claim under state law. Depending on which laws apply, you must follow different appeal procedures.
In an ERISA claim, you cannot file a lawsuit until you complete an administrative appeal process with the insurance company. Strict filing deadlines and evidentiary rules apply to ERISA claims. For example, it is virtually impossible to submit new evidence after the administrative appeal is completed.
In order to avoid costly mistakes, consider speaking with an experienced life insurance lawyer before you appeal a group life insurance denial.
Incontestability and Life Insurance
Many states, including Florida, Louisiana, and Texas, have incontestability laws which prevent a life insurance company from disputing coverage after a period of time. Even when an incontestability clause is not legally required, you may find one in your policy. Life insurance policies are typically contestable for two years. After this period, the insurance company cannot dispute coverage unless an exception applies (such as non-payment of premiums). In Louisiana, the contestability period is two years. If the insurance company has denied a claim on a long-standing policy, contact a life insurance lawyer for assistance.
Bad Faith Life Insurance Denials
If your personal life insurance claim is denied in bad faith, the insurance company may owe you additional punitive damages. You may have a bad faith claim if:
- You provided sufficient evidence to support your claim,
- The insurance company refused to pay benefits, and
- Its refusal was arbitrary, capricious, or without probable cause.
If you believe your claim was denied in bad faith, contact a life insurance lawyer immediately.
Consult With a Houston Life Insurance Lawyer
A skilled life insurance lawyer can help you navigate your plan’s claim and appeals processes — as well as ensure that you receive the benefits you deserve. For over 20 years, J. Price McNamara has represented families with life insurance and accidental death claims. Contact his office for a personalized assessment of your case.