Mansell, Engel & Cole

Life insurance claim denials are rare but devastating

Death is something everyone must face but few like to think about. It is difficult to let your mind go to the possibilities that might end your life or the circumstances that might take you from your loved ones. However, if your spouse cared enough to consider these things and prepared for that moment by purchasing a life insurance policy to protect you, you may have felt comforted that, at the very least, your financial needs would be met during a difficult time.

Unfortunately, that difficult time came all too soon, and you were likely grateful to your spouse for providing you with such security. What a shock it must have been when the insurance company denied your claim and refused to pay the benefits of the policy.

Why was my claim denied?

The insurance industry is proud of the fact that it denies or delays paying out only 0.7 percent of life insurance policy claims in the average year. In all, annual life insurance payouts can reach $64 billion. While such denials may be rare, it doesn't change the fact that the company rejected yours. Some of the common reasons why an adjuster may have rejected your life insurance claim include:

  • Your spouse neglected to keep up with the premium payments.
  • Your spouse died within the contestability period (usually two years after the purchase of the policy).
  • Your spouse died while he or she was committing an illegal act.
  • Someone named as a beneficiary on the policy was responsible for your spouse's death.
  • Your spouse was not truthful on his or her application for the policy.

In fact, material misrepresentation is the most common reason why life insurance agents reject policy claims. Such misrepresentation may include omitting information about existing medical conditions, lying about one's income or other insurance policies, or excluding details about an unhealthy lifestyle, such as smoking or obesity.

What now?

The good news is that insurance companies often reverse their decisions and pay a previously disputed claim if the beneficiary appeals. You may be considering appealing the denial of your spouse's policy claim, especially if you feel the insurance company didn't do its due diligence in investigating your claim.

Of course, at such a time, you may have little emotional capacity to learn the process for appealing a claim or to deal with the hassle of contacting the insurance company and fighting for your benefits. Fortunately, there are Oklahoma attorneys with experience helping people like you to pursue a fair resolution when life insurance companies dispute a claim.

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