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Life Insurance and AD&D Claims in Alabama

The promises made to get you to pay premiums are broken once you are gone.

Life Insurance Claims

Life insurance is the original safety net for your family in the worst time of their life. Over the past decades, we have found that many insurance companies sell people life insurance as a means to protect their families. What those companies sell is the promise of a lump sum payment that will take care of the family’s financial needs while they grieve in the event the insured person dies. But all too often, those promises are broken.

Life insurance companies often take a series of steps to deny a life insurance claim. The first step is to try to rescind the policy, which is essentially voiding the policy. Insurance companies will claim that some required step wasn’t taken before the death of the insured and will send your estate or your loved one a much smaller check refunding the paid premiums, trying to get the beneficiary to “consent” to the policy being voided out. 

You have lost a loved one. You are faced with funeral expenses, medical expenses, and the loss of a loved one’s income. The bills are piling up, and during your grief, the insurance company sends a small life insurance payout, hoping you are desperate or distracted enough to cash it. This ‘premium refund’ scheme is (to us) the most offensive because it takes advantage of families in their most trying hour. Do NOT cash that premium refund check until you talk to an attorney.

Another life insurance company tactic we see all too often is hiding the very existence of the life insurance policy. You had some conversation long ago with your loved one who has now passed away. You recall they mentioned an insurance policy, but you cannot find a physical copy of their life insurance policy in their belongings. You search everywhere.

This insurance company tactic often comes up when your loved one was employed and had group insurance benefits through their employer’s group insurance policy. Only by investigating the claim using an attorney will you find the life insurance policy, and even then, the search for those life insurance benefits is not over. We pride ourselves on exhausting every avenue to find those policies that you and your loved one had in place to take away the financial burdens of death and provide you time to grieve.

The fine print. We have all heard of stories where insurance companies try to use the fine print in policies to avoid paying a life insurance claim. That fine print is often contained in what the law refers to as “exclusions” in a policy. Those exclusions are placed in the insurance contract where the life insurers give themselves ways out of paying valid claims. This tactic often runs afoul of the law. Only by getting a lawyer working for you can you fight back against the exclusions in a claims process.

Accidental Death & Dismemberment Insurance

Another part of the safety net provided by life insurance takes the form of something called Accidental Death and Dismemberment insurance, often referred to as AD&D insurance coverage.

This is a limited form of insurance that has some of the coverages of disability insurance and some of the coverages of life insurance. Because this is typically a clause in life insurance policies, the beneficiary is often unaware of the coverage and is sometimes entitled to additional benefits under these policies while also being entitled to benefits under an Accidental Death and Dismemberment policy. Accidents are just that: accidents. These benefits are meant to offer protection for when the unforeseen occurs.

What AD&D Claims Are Covered?

Accidental Death and Dismemberment (AD&D) insurance is typically provided as part of a life insurance policy, but AD&D insurance policies can sometimes be separate standalone insurance policies. The benefits they provide are related to the nature of the injury or death that caused the claim to be filed. The amount of benefit provided for an injury is tied to the nature of the injury itself. If you lost your arm in an accident, you would get one level of benefit, and if you lost your sight, another benefit.

Because many ERISA benefits are provided by the employer at no cost to the employee (no payroll deduction is required), many people are unaware of the ERISA-governed benefits they have at work. Of those who are aware of the benefit, very few can identify how much coverage they have.

Many times, widows and widowers have come to our office having received a “basic life benefit” on the death of their spouse. Only after we investigate does it come to light that the deceased spouse purchased supplemental coverage available under their employer’s ERISA Plan, that the client had spousal coverage under the ERISA-governed life insurance plan at their work, or there was an additional benefit from AD&D insurance or pension death benefits to compensate them for their loss.

FAQs | Life Insurance and AD&D Claims

Yes. If you have a policy with both life and AD&D benefits or separate policies providing both, your right to those benefits is not exclusive.

It depends on the language of the insurance contract. Many life insurance companies have very short windows of time after the insured’s death to provide ‘notice’ of a claim. On top of the notice of claim provisions in the policy, you would also have a separate clause in the insurance contract placing a time limit on your right to bring a lawsuit.

Notifying the insurance company of a death can be difficult if the policy was purchased by the deceased person. While some policies have details on how to provide notice, many older policies do not and can lead to a search for the proper contact. Having an understanding of the law and possible defenses to the claim that the insurance company may use to deny the claim is crucial, beginning with that first contact.

Often, the insurance policy will lapse due to nonpayment of premiums. Without notice of a claim, no life insurance benefit will ever be paid.

Yes. Insurance companies do not make money paying claims. They make money collecting premiums. They save money by denying claims.

Yes. Proving death is not always dependent on having the body.

This would depend on the state laws governing the life insurance policy.

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