A Personal Injury Lawyers Lesson On Life Insurance Claims.

When  Life Insurance Claims Are Denied

A life insurance policy affords peace of mind and a financial promise when the policyholder dies. It can provide for children and spouses while replacing lost income, paying bills, funding education and covering funeral and final expenses.

Peace of mind turns to panic and disbelief when the insurance company breaks their financial promise and the beneficiary’s life insurance claim is denied.

If the insurance company has turned down your claim, you will likely have a lot of questions, and no solid answers. How can the insurance company deny a claim?  Who was responsible?  You feel like you should be able to trust the insurance company, but you are not sure. Do you have a claim? Who can help? How can I arrange payment if I need a lawyer?

How Can a Life Insurance Claim Be Denied?

Here are some reasons the insurance company may give to deny your claim:

The Contract Was Not Legal
Insurance companies use a process of underwriting to determine whether or not they will insure the person.  They ask questions that give them important information about the applicant. Depending on the answers given, the insurance company may deny coverage and refuse to sell the policy at all. Alternatively, the insurance company may enter into the contract agreement with the policyholder, but the answers to the questions, will determine the cost of the premiums the policyholder pays.

A life insurance policy is a contract. If it wasn’t legally created then it wasn’t legally binding. When the truthful answers on the original application would have denied coverage or been charged more, the insurance company can deny your claim.

Material Misrepresentation: Does The Truth Matter?
Sometimes applicants make mistakes or omissions on the application form by accident. They might incorrectly report their age, or weight. Sometimes it happens due to memory lapse especially with their own or their parents’ medical histories spanning over many years. Sometimes individuals do it on purpose to improve their chances of getting life insurance or getting it at a lower price. This could include things like drug or alcohol use, a criminal record, employment history or high-risk activities. Whether errors were made on purpose or by accident is not a reason for denial. The real issue is that if the original policy would have been denied or charged differently, the claim can be denied because of material misrepresentation.

Failure To Make Changes: Who Is To Blame?
Life insurance claim disputes are inevitable if no one was listed as beneficiary on the original forms. This may have been a mistake made by the insurance agent who sold you the policy. No matter who is at fault, it can create big problems when the policyholder dies and the intended beneficiary submits the claim for benefits.

If the policyholder had been married more than once but neglected to change the name of the beneficiary, the former spouse may have grounds to claim if is still listed as beneficiary.

Life insurance policies are often arranged and paid for by the employer as part of an employee benefit program. Problems arise if the employer made mistakes on application forms or did not include all necessary data. This could have to do with incomplete job descriptions or failure to change job status.

Life Insurance Companies May Site Any of The Above Reasons For Claim Denial or Delay.

Lapse Of Payment
A life insurance policy is a contract between the insurance company and the policyholder. If the policyholder does not make his payments, the life insurance policy is not in effect. However, in some cases, the policyholder misses a payment. This could happen for any number of reasons, but commonly as an over site. Most life insurance policies have a thirty-day grace period within which, the payment can be made without penalty. If a payment has been missed, the insurance company has a legal obligation to notify the policyholder in writing.  For lapses of more than one payment, other arrangements must be made. If the insurance company agrees, the policyholder may be allowed to reinstate the policy if he makes up the missed payments.

Can I Trust The Insurance Company?
Insurance companies employ highly trained personnel who understand the ins and outs of insurance law. They are familiar with the legal wording in insurance policies, yet, mistakes do happen. The sales agent who sold the policy could have made an error. There is a lot of fine print on insurance policies that can be dozens of pages in length.

While it means everything to you, winning or losing this claim can change your family’s future in a big way. It is just another day to the insurance company. If you lose they get to keep more money in their bank account. It is very wise to look out for your own best interests, find out the facts, fight for your rights and get help, if you need to.

This article is brief overview of the issues that may be involved in a life insurance claim dispute. It is in no way complete. It does not take the place of experienced legal counsel and is intended for information purposes only.

Who Can Help?
There is no one, standard policy regarding terms, wording, coverage and exclusions. Each policy and situation is unique. Personal injury lawyers are skilled and experienced with insurance law and policies. Choose to meet with an experienced lawyer who can do a thorough examination of your policy and the unique details of your case. Most personal injury lawyers in Toronto offer free case evaluations. He/she can then let you know whether or not you have legal rights to claim and if they are willing to represent  your case.

How Long Will It Take?
Most insurance claims settle before going to trial. An experinced lawyer will carry out strategic step-by-step case building, at each stage. Then, if necessary, when the time comes, they are completely prepared to go to court. Look for a firm that has the support staff, experience and financial ability to take on large insurance companies and win.

What About Payment?
With most Toronto personal injury lawyers, there are no up front fees for the initial consultation or work done on your behalf. You do not pay until your claim and the dispute is settled in your favour.