When a family suffers the loss of a loved one whose life insurance policy was supposed to help to take care of them in the future, it can come as a devastating shock to discover that their claim has been denied. Although rare, if this happens to you in the Oklahoma City area, it is important to immediately consult an experienced insurance attorney to discover your options and the best way to proceed.
The contingencies that void coverage
Death benefit claims are usually denied for one of four reasons:
- Policy delinquency, in which there is a lapse due to the nonpayment of premiums or if the principal has allowed the insurance to expire and not told the beneficiaries.
- Material misrepresentation, when the policy holder has withheld the truth of certain health conditions in the initial medical examination, lied about income or immigration status, withheld information about another insurance policy, or if the insurance agent has not provided correct information on the application.
- If the death is outside the scope of coverage, especially within a contestable time frame occurring typically within the first two to three years of the effective date.
- Omission of key documents such as a death certificate, or incorrect documentation during the claim process.
Actions to take to avoid a life insurance claim denial
The contestability period is often the reason for a claim denial, so it is important for the policy holder as well as their heirs and beneficiaries to understand at the outset what time frame the insurance covers.
After the initial denial letter, the beneficiaries should contact the insurance company for clarification and be prepared to back up an appeal to the denial with documents such as autopsy reports, medical records or insurance receipts. It is important to check if there is a time limit on appeal. Some beneficiaries may seek help from the Missouri Department of Insurance to understand more about insurance denial claims.
Making sure to understand the contingencies written into a densely worded policy at the outset is probably the best way to proactively understand what is and what is not covered. Examining the initial application responses both of the policy holder and his agent will identify any incomplete or inaccurate responses that could cause problems in the future.