If you have a life insurance policy, you may think that your beneficiaries are guaranteed to receive the death benefit when you die. However, this is not always the case. There are some legal reasons why your life insurance company can deny your Oklahoma City, Oklahoma, claim.
Policy delinquency
One of the most obvious reasons why your life insurance company could deny your claim is if you stopped paying your premiums and your policy lapsed. Life insurance is a contract between you and the insurer, and you have to fulfill your part of the agreement by paying your premiums on time. If you miss a payment, your policy may enter a grace period, which is usually 30 days, during which you can still pay your premium and keep your coverage active. However, if you fail to pay within the grace period, your policy will be canceled, and you will lose your coverage.
Material misrepresentation
Another reason why your life insurance company may deny your claim is if they find out that you lied or omitted important information on your application. This is called material misrepresentation, and it can affect the insurer’s decision to issue you a policy or charge you a certain rate. For example, if you lied about your health condition, smoking status, occupation, hobbies or criminal record, those may be material misrepresentations.
Material misrepresentation can lead to a claim denial if it is discovered during the contestability period, which is usually the first 2 years of the policy. During this period, the insurer has the right to investigate any claim and verify the accuracy of the information you provided in your application. If they find out that you misrepresented yourself in a way that would have affected their underwriting decision, they can deny the claim and cancel the policy.
Contestable circumstances
Another reason why your life insurance company can deny your claim is if they suspect that the cause of death was not covered by the policy or was excluded by a specific clause. For example, some policies may not cover death by suicide, homicide, accident, war, terrorism, illegal activity or dangerous hobbies. These are called contestable circumstances, and they may vary depending on the type and terms of the policy.
Contestable circumstances can also lead to a claim denial if they occur during the contestability period. The insurer may conduct an investigation into the cause of death and request additional documents or evidence from the beneficiaries or other sources. If they find out that the death was not covered by the policy or was excluded by a clause, they can deny the claim and refund the premiums paid.