A life insurance policy is meant to provide financial security to beneficiaries after their loved one’s death. However, if a life insurance company decides to deny a claim, beneficiaries can be left feeling lost, uncertain, stressed, and unsure of what to do next. Knowing what options you have as a beneficiary can be helpful in quickly taking steps to rectify the situation.
Understanding how to sue a life insurance company is vital to fighting against wrongful denials and getting the benefits you and your family are entitled to.
Key Takeaways
- Insurance companies deny life insurance claims for various reasons, including errors, fraud accusations, and policy exclusions.
- Knowing your contestability is crucial to filing an appeal.
- Carefully reviewing the denial letter is vital to deciding the next steps.
- Keep detailed records and evidence to strengthen your case, should it come to suing.
Why Was Your Life Insurance Claim Denied?
Common causes for life insurance claim denial include, but are not limited to, the following:
- Incomplete paperwork: If paperwork is missing or incorrect, this can lead to a denial.
- Non-disclosure of medical conditions: Failing to disclose relevant health issues when purchasing the policy can lead the insurer to deny the claim.
- Policy exclusions: Certain causes of death (suicide, overdose, or death due to dangerous activities) are excluded from most policies.
- Lapsed policy: If you miss any premium payments, the policy can lapse and invalidate your coverage.
Understanding why your claim was denied is the first step toward determining whether or not you should go through the trouble of suing a life insurance company with an experienced life insurance attorney like those at Sinclair Law Firm.
Contestability Period: Why It Matters
The contestability period is like a probationary period during the first couple of years of a policyholder’s new life insurance policy. The insurance company usually takes this time to review the initial policy application and death benefit, making sure there’s nothing suspicious going on, like life insurance fraud.
This can be a bit stressful in a homicide or other complicated situation where the police are involved, policy beneficiaries have to be cleared, and the case has to be closed. This can delay the death benefit payment as the insurance company will wait until they’re sure there’s no wrongdoing or to clear any discrepancies before they pay on the policy.
How to Sue a Life Insurance Company: What Should You Do Before Filing?
Before you decide to sue a life insurance company, you’ll want to make sure you’ve exhausted all other options. These cases can be long, drawn out, mentally and emotionally taxing during an already trying time, and most of all, expensive. Ensuring you have a strong case is essential, so follow these steps to strengthen your position:
- Carefully Read the Denial Letter
The life insurance company is required to provide a written letter explaining why the claim was denied. This letter contains valuable information about why the claim was rejected and should be carefully reviewed to understand the specific reasons for the denial. Reviewing this letter with a life insurance attorney can be helpful, as it sometimes contains insurance jargon to confuse beneficiaries.
- Fully Cooperate with the Insurer’s Requests
It can seem excessive, but it’s important to fully comply with the insurer’s requests for documentation and information. Failing to do so could result in legitimate denials, and you want to ensure you’ve covered all your bases and stayed compliant.
- Bad Faith Denials: When the Insurer Isn’t Being Fair
What are bad faith denials? This happens when the life insurance company is engaging in dishonest and unfair practices by not upholding its contractual obligations. For example, if the policyholder passes away under circumstances not included in the list of exclusions, all processes are followed, and all paperwork is valid. If the claim is still denied without a reasonable explanation or payment is delayed without cause, this could be considered a claim denial in bad faith. In these cases, suing the life insurance company may be necessary to get compensation for the benefits owed to the beneficiaries.
How Can You Make Your Case Stronger?
If you’ve come to the conclusion that you have no recourse but to sue the life insurance company, there are a few things you can do to increase your chances of winning your case.
Document All Communication
Keep a detailed record or log of all communications with the insurance company, including phone calls, emails, and letters. This will help verify any discrepancies, show how the insurer has responded to your claim, and determine whether they acted in bad faith.
Compile a Portfolio of Evidence
Keep a portfolio of evidence to show your compliance with the insurance company. It should include:
- The original policy documents
- Proof of premium payments
- Correspondence related to the claim and denial
This thorough paper trail helps demonstrate that you complied with the policy’s terms and that the insurer wrongfully denied the claim.
Hire a Skilled Life Insurance Attorney
Filing a lawsuit against a life insurance company can be daunting and complicated. Having an experienced attorney from Sinclair Law Firm, who knows insurance law and the tactics used by insurance companies, can provide you with the legal support you need to challenge an unfair denial. We’ll ensure you follow the right processes and advocate for your rights to the fullest extent.
Take Action with Professional Help
Suing a life insurance company can feel overwhelming, but it’s often necessary to get the money beneficiaries are owed when a claim is denied in bad faith. You can improve your chances of success by documenting everything, understanding the reasons for denial, and hiring a skilled life insurance attorney. Sinclair Law Firm has years of experience helping clients fight back against wrongful life insurance denials. Contact us today to get the justice and compensation you deserve!