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How To Prevent Having A Life Insurance Claim Denied

Life insurance policies include several circumstances that could cause coverage to be cancelled. Like auto or renters insurance, every life insurance provider has its own procedure for handling claims which is unique to every policy. Whatever the reason, the denial of a claim within the time of grief following the death of a loved ones complicates the entire situation for unprepared families and their heirs.

Certain situations are that life insurance claims may be rejected. If your claim for life insurance is rejected, you may do a few things to help you get the benefits you deserve. This article will help know the reasons that insurers might deny an insurance claim for life and what you can do to fix it.
Life insurance reasons for why claims are not accepted

Insurance companies deny the death benefit in life insurance claims due to reasons such as policy delinquency and material misrepresentation. They also deny claims based on contestable circumstances , and failure to document.

In more detail, insurers deny a life insurance claim for:

Policy delinquency

The policy holder did not pay the premiums in time, which causes the policy to expire. “The primary reason why a company refuses to pay the death benefit is due to the fact that insurance coverage is not valid on the individual for whom it is claimed” explained Jack Dolan, a London-based solicitor. “Sometimes individuals allow their policies to expire and fail to notify their beneficiaries about the expiration date of the coverage.”

Materially incorrect representation

An error in the information on the initial application for life insurance. No matter if a heart condition is present or a smoking history or information about weight gain or weight insurance application could revoke the whole policy.

“In the case of life insurance the two factors that impact the cost is your overall health as well as age” explained the consumer group’s Bridgeland. “If you stated that you’re forty instead of 45 when he filled out the application, they are not able to end the policy, however they can subtract the premium from the amount of benefit.”

Other false representations include:

Making up earnings
The non-disclosure of another life insurance policy
The incorrect application information supplied by the agent
Inadvertently omitting treatments for minor illnesses
False representation of the status of immigrants

Contestable circumstances

The most common contestable circumstance is a death beyond the coverage most likely due to the fact that the time of the death is within a time frame that is contestable. The contestability period is the first two or three years from the policy’s date of effective when insurers will deny claims in certain circumstances. These include suicide or death while performing an unlawful act. Although policy exclusions are decreasing in current options, older policies may do not cover death while serving in the military or war-related acts and aviation, as well as dangerous activities like scuba diving and mountain climbing, and to protect against health hazards like HIV.

Documentation failure

Documentation failure is the result of family members or heirs who fail to submit the required documentation for the benefit of death. At a minimum, insurers need the death certificate to begin the process of payment.

What is the significance of the contestability timeframe

The contestability of the first few to three years of the brand new life insurance policy comes with the concept of a probationary period in which the insurer’s rights are a part of an examination of a death benefit in order to look into the payout for fraud or misrepresentations in the application.

Although an investigation may delay the payout in the case of death benefits insurers will pay the policy for as that investigations come to the conclusion that there was no wrongdoing by the beneficiary. If there is murder, for example insurance companies pay the benefit only after police have cleared the beneficiary of the policy.

In the case of David Spain, a Manchester-based lawyer who has a specialization in winning settlements of insurance claims against people who have been denied benefits contestability is at the core of the majority of claims he is able to see. However, rather than being a result of insurance companies making a mistake to avoid paying a death benefit Spain stated that often policyholders and inheritors do not understand the scope, character and complexities of protection.

“What I’ve seen is excessively complicated applications for life insurance and too detailed policies that contain exclusions designed to profit the insurance company and is not noticed by the majority of customers,” he said. “I’ve observed individuals who were convinced that they were insured with life insurance to be able to pay off their home however what they actually were actually carrying was an accidental death insurance.”

What should you do if you’ve been denied life insurance claim?

The receipt of an insurance claim denial notice strikes terror into the hearts of those who depend on the replacement of the policyholder’s earnings. However the sole guarantee of receiving the payout is once the money is deposited in the account of the beneficiary. If an insurer discovers that there was a fundamental indiscretion by the policyholder cancels the policy as well as the applicable death benefit. Furthermore, the self-harming act or any other offense within the contestable time period is not a valid reason for claims denied for appeal.

In the event of obvious mistakes in the handling of claims, the departments of insurance as well as attorneys generally provide free and easy tools to convince insurers to settle legitimate claims. Even if an insurance company refuses to pay a claim in appeals, those who are dissatisfied with the decision may exercise the benefit of foresight by contacting an attorney.

Contact the insurance company

Insurance companies outline the reasons they have for denial in their initial denial letters. In the event that the reasons do not seem clearor lack sufficient supporting informationthe proper procedure is to request for additional information about the specific grounds for refusing the payment of the death benefits.

In the event that the beneficiaries who have been denied appeal an appeal, the documentation required will likely include autopsy reports, medical records and insurance reimbursement receipts.

In instances involving employer-sponsored life insurance or other similar policies, 60 days remain to contest the decision.
Contest the denial

Beneficiaries who have been denied benefits appeal claim must present evidence in accordance with the procedure that is set forth by the insurance company. Although self-representation has no cost making complicated processes and stress in the middle of an emotional situation can come at an emotional price.

In certain instances denied applicants need to contact their state’s department for insurance and attorney general in order to avail of their experience in the field of insurance navigation. Because some states employ insurance appeals specialists, state-wide representation has a significant weight.

If you require an attorney

“As when you receive an unsatisfactory result or haven’t had a favorable decision,” said plaintiff’s insurance attorney Spain, “you need to contact an attorney for contingency.”

Spain explained that knowing the complexities of insurance and the way policies function gives plaintiffs an edge over lawyers representing themselves.

“You are able to completely reverse your situation if you try to tackle it your self,” He said.
Spain along with other plaintiffs insurance attorneys look for potential clients and evaluate their cases for appeal at no cost. If a case that is legitimate presents itself, these lawyers offer representation to their clients with a share of settlements they win.

While Spain boasts a record-breaking success rate in trials of nearly 100 percent, that’s certainly not his first preference.

“I’ve solved a lot of cases by assembling the proper evidence, the correct arguments, the appropriate cases and letters explaining my position to the insurance company,” he said. “Of course, they’ll know that you’re serious as well.”
How can you avoid the possibility of having your claim denied

Of course, avoiding denials of claims is the best result for both the policyholder and the beneficiary. Tips to prevent denials of claims are based on the approach of the policyholder to applying for insurance. Particular considerations are:

Application responses– comprehensive responses regarding the health of your family and other health-related activities that include the occasional smoking and prescription medications and dangerous hobbies
Application understanding of the terms and conditionsclarification of the conditions under which insurers pay the death benefit , and the conditions under which they don’t pay the benefit.
Review of applicationRead and re-read the application completed that was filled out by the agent.

Frequently asked questions

What is the best type of life insurance?

Finding the most suitable life insurance plan involves many moving parts that are influenced by personal circumstances and needs. It all is dependent on.

The factors to consider when selecting the life insurance provider include the history of the company and popularity for providing excellent customer care, its financial stability , and the pricing. These elements will ultimately impact the experience for the customers as well as the worth of the policy.

What type of medical exam are required for the buying for life insurance?

A medical exam for life insurance is a simple physical exam that includes height and weight measurements as well as a blood pressure test. The medical examiner can also require previous medical tests as well as a history of the patient, and blood and urine samples.

What are the most important factors that determine whether an insurance company pays its death reward?

If there are no problems in the the life insurance claim and there aren’t any contestability issues in play, financial stability can be an important role in the heir’s eligibility for an inheritance upon death.