Purchasing life insurance is like providing a safety net for your family. For many in Oklahoma, a life insurance policy is the only way they can affordably assist their loved ones if they should pass away. In fact, your loved one may have offered an act of kindness for you by purchasing a life insurance policy that named you as the beneficiary.
After your loved one passed away, you may have counted on that policy to cover your expenses. If the insurer denied your claim for benefits, you have the right to know why and to seek assistance if you feel the rejection is unjustified.
As with any insurance policy, the answer may lie in the document itself. Life insurance companies often print their policies on thick paper with fancy font and decorative borders. However, the real embellishment is in the fine print, and it behooves a policyholder to read it carefully. The documents explain any exclusions or exceptions to the policy, which every insurer has, and this may clarify why the company denied your claim. Some common reasons for life insurance claim denials include the following:
- Your loved one's death occurred within the contestability period, which is typically the first two years after purchasing the policy.
- The insurance company feels your loved one intentionally misrepresented information on his or her application for the policy, such as his or her age, smoking habits or general health.
- Your loved one committed suicide within a certain period of time after purchasing life insurance.
- Some insurance companies may deny a claim if the death was in any way related to drug, alcohol or tobacco use.
- If your loved one died in the act of committing a crime, even something as minor as trespassing, some insurers reserve the right to deny your claim.
- Many policies list specific activities which the company considers too dangerous to be insurable, such as scuba diving, parachuting or auto racing, and may deny a claim if your loved one died participating in any of them.
Every insurance company has its own exclusions and exceptions, and the policy may name those. However, some are open to interpretation. For example, the insurance company may determine your loved one's death occurred during a dangerous activity not specifically listed on the policy and which your loved one did not consider dangerous, such as skiing. It may be worthwhile to seek legal advice about disputing a rejected claim.