Although you cannot bring back your beloved, life insurance provides the much-needed financial assistance to give your loved one a befitting send-off, clear debts, and cover day-to-day living expenses while you cope with grief.
Whether you’re in the middle of your application or the claim was dismissed, understanding the grounds for rejection prepares you to contest the decision, improving your chances of receiving a payout.
If you’re a policyholder, you can take appropriate measures to ensure your beneficiaries get the benefits they deserve after your death.
Unpaid Premiums
Defaulting on premium payments causes a policy lapse, stripping beneficiaries of coverage. Insurers typically provide a one-month extension after the premium’s due date to allow the policyholder to make payments. If the policy owner dies within this grace period, beneficiaries can still receive death benefits.
Note that policyholders can activate the lapsed life cover by paying the due premium plus interest. However, policy reinstatement rules vary with the state and insurer. Additionally, policy owners can avoid coverage lapses by automating premium contributions from their checking accounts.
Death Within the Contestability Period
Contestability clauses provide the insurer with a period of time (usually one or two years) from the policy’s effective date to review and contest claims. If a policy owner dies within this window, the insurance company can investigate and deny the claim if it discovers false, incomplete, or misleading information during the application. However, insurers are typically obligated to pay the claim if death occurs after the contestable period unless they can prove fraud.
Remember, the misrepresentation and cause of death don’t need to be connected. For instance, insurers could deny a claim if the policyholder died in a road accident but omitted their history of drug use.
Illegitimate Beneficiaries
Policyholders should name primary and contingent beneficiaries to receive death benefits. The insurer can reject a claim if the primary beneficiary is absent or dies before the policy owner and no secondary beneficiary is declared.
Death Not Covered
Insurers can deny a claim if the policy expressly excludes the cause of death.
Standard exclusions can range from:
- Suicide within the contestability period
- Death due to illegal drug overdose
- Death during crime
- Death during risky hobbies
Contact a Denied Life Insurance Claim Lawyer
Reach out to a denied life insurance claim lawyer to understand the reasons for rejection and potentially appeal the denial. Our team at Sinclair Law Firm will assess your situation, explain your rights, and compile the required evidence to support your claim. Secure your rightful compensation—contact us to speak with a denied life insurance claim lawyer.