A life insurance dispute is the last thing a policyholder would want for their policy’s beneficiary. Every year, life insurance claims go into dispute, causing the beneficiary to have to appeal a claim and get the claim reviewed.
It’s a complicated process because there are several reasons for a dispute.
Why a Life Insurance Dispute Occurs
Most insurers pay out claims without an issue, but there are times when an insurer can deny a death benefit. If this occurs, the estate or beneficiary will be reimbursed, in most cases, for the premiums that were paid by the deceased.
The main reasons for claim rejection are:
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Contestable Policy
Louisiana insurance code, Title 22, covers the state’s life insurance laws. Insurance policies often contain a contestability period that normally lasts two years from the time the person took out a policy. If the policyholder dies within this two-year period, the claim may be contested.
If a policyholder lied to the insurance company or misrepresented his/her life in some way, the claim can be denied.
This will only occur in the first two-year period. If the policy passes this two-year period, the insurer cannot contest the policy.
Suicide or Homicide
Insurance companies put suicide clauses in their policies that often span a two-year period. If the policyholder were to commit suicide during this period, the death benefit would not be paid.
Homicide is a little different.
If a beneficiary is suspected of any wrongdoing or involvement in the homicide of the policyholder, the insurer will not pay out death benefits until the beneficiary is cleared of any wrongdoing.
The additional most common circumstances surrounding a denied claim are:
- Failure to keep paying policy premiums
- Death not covered in the policy
- Death involving illegal activity
The insurance policy can be denied for a multitude of reasons. If you take the right steps to prepare for a dispute, you can expedite the appeal process.
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6 Steps to Take After a Life Insurance Denial
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1. Request a Denial Explanation
Insurers must have a reason to deny a claim. They can’t deny a claim for no reason. You should receive a denial in the mail with an explanation of why your claim was not approved. If this explanation is vague or you have more questions, reach out to the insurer and ask for clarification on why your claim was denied.
2. Ask About the Appeals Process
Knowing how to handle the appeals process is the key to winning an appeal. Every insurance company has its own appeal process, even if they’re similar in nature. Contact the insurer to:
- Request paperwork to file the appeals
- Ask how long you have to make an appeal
- Ask if a hard copy of documents are required, or if electronic copies will suffice
If you don’t ask about the process, you’re at risk of missing the appeal’s deadline.
3. Contact an Attorney
You can handle the appeals process on your own, but you’re taking a risk of losing your appeal. The attorney you choose will play a major role in your appeals process, from ensuring deadlines are met to gathering evidence.
4. Start Gathering Documentation for Your Appeal
Your attorney should explain the documents that you need to file the appeal. An attorney may be able to help you obtain some of the documents you need, too. The documents you’ll likely need are:
- Policyholder’s death certificate
- Copy of the insurance policy
- Receipts for all paid premiums
- Reports or doctor notes that may help your case
The documents that you provide should help strengthen your claim and show that a denial was unjustified. If you forget to include pertinent information, the forgotten information will not be taken into account during the appeal.
5. File the Appeal
Filing the appeal is the next step to take. You should keep copies of all documents available. These copies should be kept in a safe place. When filing the appeal, check and double-check that you’ve followed every step in the appeal’s process precisely.
If you fail to follow the instructions, your appeal may be denied, or at the very least, held up by making errors.
6. Confirm That the Appeal was Received
It’s up to you and your attorney to make sure that the appeal was received. One way to do this is to pay for the package to be sent via certified mail when sending in the appeal. The tracking and receipt on delivery will be one form of evidence that the package was received.
Once received, call the insurance company and request a receipt of the appeal.
“Also, cases involving employer-based life insurance policies that fall under the Employee Retirement Income Security Act of 1974, or ERISA, come with a 60-day appeal period that can easily expire without an attorney’s help,” explains Bankrate.
If you’re dealing with a life insurance dispute, contact our Life Insurance Denial Lawyers. The faster you call us, the better chance you have of winning your appeal.
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