Many Oklahomans carry life insurance policies as a means of providing for their families should they unexpectedly pass away. Sadly, some insurers act in bad faith and will deny a claim for benefits that should be valid. Some of these denials are based on “contestable circumstances.”
What is a contestable circumstance?
Many life insurance policies have a “contestability period” which in Oklahoma generally lasts for the first two years starting from the policy’s effective date. Claims falling in this period will be denied under certain circumstances, such as suicide or crime. Some older life insurance policies, however, exclude death during military service, while flying, while engaging in risky pastimes and certain health conditions. A contestability period is essentially a probationary period. It can lead to delays or denials of death benefits.
Options if your claim is denied
If your insurer has mishandled your claim, you may want to contact the Oklahoma Insurance Department and file a complaint. There are also some steps you can take on your own or with the assistance of an attorney. If the denial is vague or unsupported you can ask your insurer to provide specific information about the denial of benefits. You can also contest the rejection. If you have received a denial letter, however, it is important to seek the help you need to contest the insurer’s decision.
Bad faith
When an insurer wrongfully denies a claim, it is considered an act of “bad faith.” When it comes to life insurance, the insurer may try to claim that the policyholder passed away under conditions that are not covered by the life insurance policy or that the policyholder passed away before the policy became effective. If this happens to you, it is important to understand all your rights and options so you can make decisions that are in your best interests.