Life insurance belongs to the “peace of mind” category of insurance products and provides financial security ensuring that an insured’s loved ones are protected in case of an unexpected death. However, there are instances where life insurance claims are denied, leaving beneficiaries who expected to be taken care of after the death of a loved one dealing with a financial fallout they had not expected and being forced into a fight with an insurance company with bottomless resources at a time when they should be allowed to grieve and work on moving forward with their lives.

Common Reasons Life Insurance Claims Are Denied

There are many reasons a claim for life insurance benefits can be denied.  One such reason could be policy exclusions.  Most life insurance companies have exclusions for specific causes of death which mean that no benefits are payable if the insured died in specified excluded circumstances.  Examples of this are death occurring during criminal acts, death occurring from suicide, death caused by pre-existing issues, or death caused by war or terrorism.  It is important you read your life insurance policy carefully so you are aware of any exclusions.

Another basis for denying a claim for life insurance benefits is lapsed premiums.  When a party fails to pay their insurance premiums on time the insurance company will be able to deny coverage under the policy.  Often insurance companies will give a grace period for the first failure to pay premiums on time but at the end of the day an insurance contract is one in which the insurance company provides insurance coverage further to payment of premiums.  If your premiums are not paid in a timely manner, any claim for benefits from that policy may be denied.

One of the most common reasons life insurance claims are denied is for misrepresentations by the applicant.  Insurance companies issue insurance coverage for individuals based on the medical information and representations of an applicant for insurance coverage.  An individual who is applying for an insurance policy has an obligation to disclose all material facts to the insurer when they apply for life insurance coverage.  The insurance company will base their decision to insure and individual, and at what rates, based on this information.  If an applicant for insurance misrepresents material facts to the insurance company, when a claim is then made on a policy the insurance company can deny the claim based on the material misrepresentation.

The Contestability Period

For most life insurance policies there is what is called a contestability period.  During this period, usually the first two years of coverage, if a claim is made for life insurance benefits and the insurance company can show there was a misrepresentation by the insured, this will be sufficient for the insurance company to deny coverage under the policy of life insurance.

However, if a claim is made for benefits under a life insurance policy after the contestability period has ended, i.e., after the first two years of coverage has elapsed, the requirement for an insurance company to deny coverage changes and they need to not only prove that there was a misrepresentation by the insured, but that there was the intent to commit fraud on the insurance company.  Proving fraud is a much higher threshold for the insurance company to meet which means if your life insurance benefits have been denied and the insured has been covered under the policy of insurance for more than 2 years the insurance company will have a much higher standard of evidence, they’ll need to be able to use to prove fraud in the circumstances.

Strict Timelines Apply

Once you have been denied your legitimate life insurance benefits, you usually have two avenues to consider, appealing the decision internally or starting a lawsuit to enforce your rights.

While most insurance policies have internal appeal processes, appealing a denial of life insurance benefits is usually the most pointless appeal in the insurance denial world.  By the time the insurance company has made the initial denial there is likely no more evidence to produce and you would be appealing the decision to the same insurance company that has already decided to deny coverage for life insurance benefits.

There are strict timelines in which you have to start a lawsuit to enforce your rights to life insurance benefits.  Wasting time on an internal appeal can lessen the time you have to make a proper investigation and file the lawsuit in time.

Yukon Life Insurance Claim Lawyers

If your legitimate life insurance claim has been denied contact our experienced life insurance lawyers for a free consultation. We will deal with the insurance company and fight for your right to compensation. We will be mindful of your individual situation and work as quickly and efficiently as possible to ensure your insurance denial is revisited and reversed.