Life Insurance Denials
Most people purchase life insurance and pay premiums so that their families and loved ones will be financially protected if the family breadwinner is no longer here to provide for them. Life insurance companies advertise peace of mind and suggest a paternal role in caring for beneficiaries. Like any profit-based industry, however, life insurers are motivated to save money and increase profitability. Life insurers do this in part by refusing to pay claims wherever possible. There are several recurring issues that trigger denials of life insurance claims. Lawyers Douglas M. Robinson and Jeffrey S. Warncke have over two decades of experience in representing beneficiaries in these unique claims, including litigation in enforcing beneficiary rights and securing the benefits intended by insurance policies.
Denials Based on Misrepresentation and Nondisclosure
Perhaps the most common insurer defense for refusing to pay benefits is the allegation that the deceased lied or failed to disclose information, such as a preexisting health condition, when applying for the policy. Often, insurers have access to but fail to evaluate medical information about the insured when the policy is purchased. Then, after years of collecting premiums, and after a death occurs and a claim is made, the insurer scrutinizes that same medical information under the proverbial microscope and conducts a search of additional information in an attempt to identify any potential misstatement or non-disclosure made in the insurance application after the fact. This practice is sometimes known as “post-loss underwriting” and has the potential of devastating consequences to beneficiaries and their families who depend on the life insurance benefits. Nevertheless, some courts have allowed insurers to rescind life insurance policies even where the misstatements or non-disclosures did not relate to the cause of death where the insurer can show that disclosure would have altered the rates charged by the insurer. By the time an insurer raises this issue it is too late for the deceased to purchase another policy.
If a life insurance provider denies your claim based upon a misrepresentation or omission in the policy application, it will send you a check refunding premiums. Do not cash that check without talking to an experienced insurance lawyer. If you do cash the check, you will legally have agreed to the insurance company’s position. At that point, it will be too late for us, or anyone else, to help you with your claim.
Beneficiaries should not simply accept an insurer’s justification for rescinding a policy and denying a claim. Close scrutiny of the actual insurance policy language, the deceased’s responses to the application questions, and the medical records themselves, often reveals that insurers have exaggerated, misrepresented, or misinterpreted the record. We have experience in reviewing these claims to see if a beneficiary has grounds to challenge the insurer and enforce the policy. In fact, we have recovered millions of dollars worth of life insurance benefits that insurance companies have tried to deny. A wrongful denial of a life insurance claim under a policy that was not obtained through an employer may entitle the beneficiary to bad faith penalties against the insurer in addition to the policy benefit.
Most states have statutory laws and most life insurance policies now contain clauses that make the policy “incontestable” after the policy has been in force for at least two years. This means that if the policy was in effect for two years or more, misstatements or omissions by the deceased in the insurance application should not entitle the insurer to void coverage. The seasoned life insurance claims attorneys at Evans, Scholz, Williams, & Warncke, LLC have experience in combating post-loss underwriting, and understand how incontestability clauses work.
Life insurance claims may also be denied or delayed because more than one beneficiary has contacted the insurer to claim the policy proceeds. Disputes over the legitimate beneficiary can be time-consuming and lengthy. Federal and state law allows insurers faced with multiple claims to the proceeds to file what is known as an “interpleader” in which the insurer deposits the funds into court leaving the competing claimants to fight over who has the legal right to the insurance proceeds.
These cases raise several issues such as:
- Was a beneficiary designation ever made?
- Was the designation specific enough to identify the intended beneficiary?
- Was a change of beneficiary completed properly?
- Was a change of beneficiary ever processed and, if not, why? (Was it lost in the mail, lost by the insurer’s staff, simply never submitted?)
- When did the change of beneficiary take effect? (Crucial when the death occurs right around the time the change was sought)
- Do any applicable laws void a beneficiary designation?
Where parties compete over claims to life insurance proceeds, the unrepresented party is at a distinct disadvantage.
Get Legal Help
The shock of having the life insurance claim denied simply adds to the grief a family is already experiencing. For more than 20 years, the Georgia life insurance claims lawyers at Evans, Scholz, Williams, & Warncke, LLC, have been extremely successful in recovering insurance benefits that insurers initially denied. We know the history, practices, and culture of the major players in the insurance industry, and long ago established our reputation with those insurers and their attorneys. In fact, other lawyers refer insurance cases they cannot handle to us.
We have the resources and commitment to work with the insurance companies to achieve a settlement when possible, and to litigate when necessary.
If you or someone you love has been denied life insurance benefits, contact us today for a free interview. We’ll discuss your case without charge. We don’t take every case, but each case we do accept gets our full, thorough attention, resulting in a track record of success for our clients. Don’t wait, because strict time limits apply, and missing a deadline could cause you to lose your right to benefits.