You have the right to sue your insurance company if they break or fail to follow the conditions of the policy. Not paying claims in a timely manner, not paying claims that have been properly filed, and making bad faith claims are all examples of common infractions.
Fortunately, there are numerous rules in place to protect consumers like you, and it is not uncommon for a policyholder to file a lawsuit against his or her insurer.
It’s difficult enough to deal with property loss, injuries, the death of a loved one, or any other calamity. It’s easy to feel overwhelmed when you have to fight your insurance provider on top of everything else.
Continue reading to discover the basics of filing a lawsuit against your insurance company for refusing your claim or other wrongdoing.
How do you fight a life insurance claim?
When a claim is denied, many family members get demotivated, and some may even abandon their efforts to obtain the benefits to which they are entitled. If they disagree with the rationale for the refusal, they have the right to file a complaint or an appeal as life insurance beneficiaries. Even if the insurance company upholds the rejection on appeal, you should consult an attorney to assess your case and chances of success properly.
If your life insurance claim is denied, you should take the following steps:
Contact the Life Insurance Company
If the insurance company decides to refuse a claim, the denial letter sent to the person who filed the claim must be detailed and explain the reasons for the decision.
Unfortunately, insurance companies frequently send imprecise rejection letters that merely indicate that the claim will not be paid without providing specific reasons. If this is the case, you should call the insurer and ask for a full explanation of the refusal.
Also, make sure to inquire about the appeals process. They should be able to tell you whether the policy enables it and what information you’ll need to make an appeal. To support your appeal, you will need to produce additional paperwork such as medical records, an autopsy report, or insurance payment receipts.
Contact a Life Insurance Lawyer to Appeal the Denied Claim
Claim denial inquiry, obtaining supporting documents, performing legal research, and submitting an appeal are all steps in disputing a denied life insurance claim. This method is governed by a set of rules that must be strictly observed.
An ERISA claim denial, for example, necessitates filing an administrative appeal within a particular time frame after receiving the denial letter. Because the papers acquired and the points made on appeal will be scrutinized during the litigation process, it is critical to perform a thorough investigation and legal research prior to filing an appeal.
Speak with an attorney who specializes in life insurance if you believe your life insurance claim was denied or delayed unfairly. After a life insurance claim is refused, an expert attorney can advise you on how to continue, which may include filing an appeal, a challenge, or a lawsuit to get the money you deserve.
Understand the Reasons Why the Company Denied Your Claim
The reasons for refused life insurance claims vary depending on the policy provisions, state and federal legislation, and the individual’s personal circumstances. The most typical reasons given by life insurance companies for refusing claims are listed below:
Can a life insurance company refuse to pay a claim?
A life insurance claim might be paid, denied, or postponed, to put it simply. So, certainly, life insurance companies have the right to deny claims and refuse to pay out, and if you’re reading this, you’re probably in the same boat.
Is there a statute of limitation on a life insurance policy?
Life insurance death benefits have no time limit, so you don’t have to worry about filing a claim too late. You can phone the company or, in many circumstances, start the procedure online to register a claim.
Why would a life insurance policy not pay out?
If you lie about any risky activities, medical illnesses, travel plans, or your family’s health history on your insurance application, the insurance company may refuse to pay out the death benefit. The best approach to avoid surprises later is to be as honest and comprehensive as possible during the underwriting process.
Risky hobbies
Depending on the conditions of your policy, your insurer may refuse to pay the death benefit if you die while participating in a dangerous activity you routinely enjoy (such as flying a private plane, bungee jumping, or scuba diving).
If your pastime is dangerous enough, your insurer may include an exclusion to your policy that prevents payment if you die while participating in that dangerous activity. This exclusion will be disclosed to you before you sign the policy (there are no hidden exclusions). Amateur pilots, for example, may require an aviation exclusion rider in order to be covered by life insurance. Their beneficiaries will not receive the death benefit if they die in a plane crash.
Murder
Because of the slayer rule, if your beneficiary murders you, they will not receive the death benefit. The slayer rule prohibits the payment of a death benefit to someone who has murdered or is directly linked to the murder the insured. In this case, the insurance company will instead pay your prospective beneficiaries or your estate the death benefit.
Deaths that happen when you’re doing something illegal are usually not covered by insurance. Most policies will not cover death that occurs while performing a crime, for example.
Suicide
Suicide is usually covered by life insurance, with one exception: life insurance contracts have a suicide clause that prevents payouts for suicide deaths in the first two years of coverage.
Suicide clauses are in place at insurance firms so that applicants cannot commit suicide shortly after their life insurance policy expires.
Can life insurance be contested?
After the insured’s death, anyone with a solid legal claim can contest the beneficiary of a life insurance policy. A dispute is frequently started by someone who believes they are the policy’s rightful beneficiary.
Contesting the beneficiary of a life insurance policy is difficult, and it’s nearly always a lengthy and costly procedure. A named beneficiary cannot be removed by an insurance company. A life insurance beneficiary can only be overturned by a court.
What happens when a life insurance policy is contested?
If a life insurer opposes a claim, the death benefit provided to your beneficiaries will be denied or reduced, and the insurer will provide a thorough explanation as to why the claim was contested.
How long can a life insurance company take to pay a claim?
According to Chris Huntley, founder of Huntley Wealth & Insurance Services, most insurance companies pay within 30 to 60 days of the date of the claim.
Do you need an autopsy for life insurance?
- All supporting documents and the death certificate When submitting a life insurance claim, proof of death is required. A certified copy of the death certificate, a police report, a toxicology report, an autopsy report, a coroner’s report, a medical examiner’s report, and, in some situations, medical records are all required documents.
- This is the original policy. If you can locate the original life insurance policy, you can review the claim’s specifics (payment amount, beneficiary, contact information for the insurance provider, and so on) before filing it. Even if you don’t have the original policy, you can still file a claim.
- Claim forms that have been completed. Claim forms are documentation that the insurance company sends to you. They will need extensive information on the insured person as well as your personal information. You can choose how you want to receive your life insurance payout on the claim form.
How long after death do you have to collect life insurance?
When the insured dies and the policy’s beneficiary files a claim, life insurance companies pay up the proceeds. After you’ve filed the completed claim papers and supporting paperwork, you should be able to collect your life insurance payout within 30 to 60 days. Insurers, on the other hand, are renowned for finding excuses to postpone or even refuse a valid life insurance claim.
Read our blog about how long it takes for insurers to pay out if you want to know what you need to do to get your life insurance payout quickly.