Dispute Life Insurance Claim Denial

Documentation Needed to Process a Life Insurance Claim

The insurance company will need a claim form, along with an official copy of the death certificate. The death certificate a funeral director often provides is not sufficient for this purpose. If the individual died within the first two years after the life insurance policy was issued, the insurance company may want to rule out suicide as a cause of death. This is because many insurance policies have a clause stating that a benefit will not be paid if the person committed suicide. The policy may specify that the beneficiary can receive a refund of the premiums paid to the date of death.

Reasons Why a Insurance Company May Deny a Claim

Every claim for benefits under a life insurance policy is examined carefully, and not all of them will be paid out. The reasons why a claim may be denied include:

• Fraud by the insured or the beneficiary
• Material misrepresentation by the insured on the application form

Material Misrepresentation

A material misrepresentation is a statement that, if the truth of the matter were disclosed at the time the application was made, would be grounds for the insurance company denying coverage to the applicant. An omission of an important fact may also be considered a material misrepresentation. In most cases, a material misrepresentation concerns the applicant's health or medical history. Other statements (or omissions) that may constitute a material misrepresentation deal with:

• Smoking and drinking habits
• Age
• Type of employment or employment history
• Hobbies
• Income
• Other insurance policies owned by the applicant

When a life insurance claim is denied, the insurance company may state that if all the facts about the insured were known at the time of the application, the policy would not have been issued. From the point-of-view of the insurer, even if the misstatement or the omission had nothing to do with the individual's death, the claim will usually not be paid.

How to Dispute Life Insurance Claim Denials

The first thing to do if you want to dispute life insurance claim denials is to contact an attorney who is experienced in the area of insurance litigation. The attorney may take the position that what the insurance company has interpreted as a material misrepresentation is not serious enough to cause the claim to be denied.

When you meet with the attorney, bring copies of the life insurance policy and any correspondence you have received from the insurance company. Once you have found and retained a lawyer, do not communicate directly with the insurance company. Any attempts from the insurance company to discuss the matter should be referred to your attorney.

Voiding the Policy

If the insurance company investigates the death of an insured person and finds that a material misrepresentation exists, they have the right to void the insurance policy. This is a contract dispute, not an indication of bad faith on the part of the insurer.

Settling the Claim Out of Court

To avoid the time and considerable expense of a trial, the insurance company may wish to settle the matter out of court. If an offer to settle is made, your lawyer will go over the terms with you in detail and offer advice about whether you should accept the settlement.

It is possible to dispute life insurance claim denials, but you will need to get expert advice to do so. An experienced life insurance attorney can look at the facts of your case and give you appropriate advice.