Most of us understand that the importance of life insurance is to ensure that our loved ones are financially secure after our passing. Unfortunately, life insurance claims are at risk of being denied by insurance companies. If your claim was rejected after the death of a loved one, a life insurance claims lawyer in Houston can help.
The last thing you should have to deal with after the death of a loved one is fighting an insurer to get the money you need to start rebuilding your life. At ERISA Insurance Claim Attorneys, we can put our 30 years of experience to work for you.
Our team deals with the insurance company while you focus on your family. Contact us today for a free case review and learn how our Houston insurance claims lawyers can help.
Table of Contents
- Understanding the Basics of Life Insurance
- Benefits of a Life Insurance Policy
- What a Life Insurance Policy Can Cover
- Types of Life Insurance Policies
- Designating Beneficiaries
- When Do Life Insurance Benefits Kick In?
- How Do Beneficiaries Receive Death Benefits?
- Under What Circumstances Can a Life Insurance Claim Be Denied?
- How Your Appeals Process Can Be Affected by ERISA
- How a Houston Life Insurance Lawyer Can Help You
- Get Help From an Experienced Life Insurance Claims Attorney Serving Houston Today
Basics of Life Insurance
Life insurance can help ease many financial hardships for loved ones. Some policies can even assist with your children’s college expenses. Life insurance is a financial planning policy that allows a policyholder to pass benefits to their beneficiaries after their death. Known as death benefits, they can be paid directly to beneficiaries once the person passes away.
For coverage to kick in, a policyholder must continue to pay monthly premiums until death. While filling out a life insurance application, the insurance company will ask the policyholder to disclose all past and current health conditions for the policy to take effect.
If a life insurance claim is denied by the insurance company, the beneficiary can take legal action to recover the money they are owed. An experienced life insurance claims attorney in Houston can help you file an appeal and potentially pursue a lawsuit if the insurance company is refusing to pay the money.
For a free legal consultation with a life insurance lawyer serving Houston, call (225) 201-8311
Benefits of a Life Insurance Policy
Some life insurance policies carry death benefits and living benefits. Living benefits are a type of rider that can be included in a life insurance policy to provide additional coverage for beneficiaries. Living benefits allow the policyholder’s death benefits to kick in before the policyholder dies. Policyholders who suffer from terminal illnesses might benefit from this rider.
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What a Life Insurance Policy Can Cover
A person dying unexpectedly or becoming terminally ill can put a severe financial strain on the family. Depending on the type of life insurance policy held by the deceased, the death benefits will cover many financial expenses for your loved ones.
Life insurance benefits may cover funeral expenses, mortgage payments, educational costs, credit card debt, medical debts, and everyday expenses. Depending on the goals of the policyholder for their beneficiaries, some life insurance policies allow policyholders to leave an inheritance to their children or grandchildren.
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Types of Life Insurance Policies
There are two types of life insurance policies: term and permanent. Term life insurance is a policy that offers coverage for a certain number of years and then ends. The policyholder is responsible for choosing the term of their policy. Many policyholders choose terms of 10 years, 20 years, and 30 years.
On the other hand, permanent life insurance is a life insurance policy that provides coverage for the remainder of the policyholder’s life. The only way that coverage stops is when the policyholder either stops paying the premium or surrenders the policy.
Types of Term Life Insurance Policies
Some of the different types of term life insurance policies include:
- Convertible term life insurance: This life insurance policy allows policyholders to convert their term policy to a more permanent insurance policy.
- Decreasing term life insurance: This life insurance policy is a renewable term policy where coverage begins to decline over the policy’s life.
- Renewable term life insurance: This life insurance policy offers a quote for the year the customer purchased the policy. This is usually the least expensive term life insurance at the beginning.
Types of Permanent Life Insurance Policies
Some permanent life insurance policies contain what is known as cash value. Cash value allows policyholders to use additional financial compensation for many purposes.
Permanent life insurance policies come in the following types:
- Indexed universal: Indexed universal is a type of universal life insurance that allows the policyholder to earn a fixed or equity-indexed rate of return on the cash value of their insurance policy.
- Variable universal: This type of life insurance policy allows the policyholder to invest their policy’s cash value into a separate account.
- Universal life: This permanent life insurance policy includes a cash value component that can earn interest. One unique aspect of this insurance policy is that the premiums are flexible, meaning they can adjust over time.
- Whole life: This type of permanent life insurance policy can accumulate cash value.
When you have questions about permanent life insurance policies, the Houston life insurance claims lawyers at ERISA Insurance Claim Attorneys can guide you in the right direction for you and your family.
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Designating Beneficiaries
Another critical step in creating a life insurance policy is the designation of beneficiaries. Beneficiaries are the people who will receive the death benefits from a policy. Potential beneficiaries include:
- Children
- Parents
- Siblings
- Business partners
- Adult children
Some life insurance policies even allow policyholders to name the charity of their choice as a beneficiary. Policyholders can also choose who they want to designate as the:
- Primary beneficiary: The first to receive the life insurance benefits
- Contingent beneficiary: The person who will receive the benefits if the primary beneficiary passes away.
When do Life Insurance Benefits Kick In?
Beneficiaries can receive life insurance benefits when the policyholder passes away. The beneficiaries are responsible for filing a life insurance claim with the insurance company. When doing so, beneficiaries must include a copy of the policyholder’s death certificate.
Most states review a life insurance claim within 30 days of receiving the filing paperwork, resulting in either an approval or a denial. If the insurer is taking too long to review your claim, an experienced life insurance claims lawyer serving Houston can step in to help move things along.
How do Beneficiaries Receive Death Benefits?
Another benefit of life insurance policies is that the policyholders decide how their beneficiaries will receive their death benefits. Some of the ways that beneficiaries can receive death benefits include:
- Lump-sum payments: A lump-sum payment is when a beneficiary receives death benefits in one payment instead of periodical payments. This is one of the most common forms of payment that policyholders choose.
- Installment payouts: An installment payout is when the death benefits are paid out to beneficiaries regularly over the life of the beneficiaries.
- Retained asset account: With a retained asset account, beneficiaries can receive a checkbook instead of a lump sum or installment payout. The insurance company operates as a financial institution and stores the payout in an account. The policyholder can write checks against the balance, allowing the beneficiary to receive interest.
It’s essential to understand all the specifics of the life insurance policy held by your loved one, as this will help you plan for the future.
Under What Circumstances Can a Life Insurance Claim Be Denied?
The insurance company can deny life insurance claims for various reasons. From the perspective of insurance companies, some of the common reasons for claim denials include:
- Contestable circumstances: Contestable circumstances are deaths that happen outside of the scope of the policy’s coverage. Insurance companies will use examples of suicide or deaths from an illegal act.
- Missing documentation: Insurance companies will deny a claim if beneficiaries forget to submit the necessary paperwork for death benefits.
- Material misrepresentation: Life insurance policies have a contestability period. This is when insurers will review all documentation to search for possible examples of fraud and misrepresentation. If a policyholder provides incorrect information on the policy, it can put the entire policy at risk.
What Role do Pre-existing Conditions Play in Obtaining Life Insurance policies?
Some policyholders may find it challenging to obtain life insurance based on the number of pre-existing conditions they possess. Policyholders with pre-existing conditions can still purchase life insurance. They just may have to pay higher premiums depending on the policy. The policy coverage can also be affected based on the policyholder’s health situation.
How Can a Life Insurance Claim be Denied?
The insurance company can deny life insurance claims for various reasons.
From the perspective of insurance companies, some of the common reasons include:
- Contestable circumstances. Contestable circumstances are deaths that happen outside of the scope of the policy’s coverage. Insurance companies will use examples of suicide or deaths from an illegal act.
- Missing documentation. Insurance companies will deny a claim if beneficiaries forget to submit the necessary paperwork for death benefits.
- Material misrepresentation. Life insurance policies have what is known as a contestability period. This is when insurance companies will review all documentation to search for possible examples of fraud and misrepresentation. If a policyholder gives the wrong information on the policy, it can place the entire policy at risk.
How Your Appeals Process Can be Affected by ERISA
Fortunately, you have the right to challenge the insurance company’s decision if your claim is denied. Unfortunately, the avenue in which you will fight for your appeal will depend on your loved one’s insurance policy.
If your loved one purchased a life insurance policy through their employer, you must seek your appeal through the Employee Retirement Income Security Act (ERISA). ERISA is federal legislation that grants employees federal rights to protect their benefit plans.
If a private insurance company purchased the life insurance policy of your loved one, you do not have to follow the ERISA laws to pursue your benefits.
Steps in the ERISA Appeals Process
ERISA automatically covers life insurance policies that an employer offers. When a life insurance policy is under the ERISA, you must follow the ERISA procedures when filing your appeal. The first step in an ERISA appeal is filing an administrative appeal with the insurance company.
An independent examiner will take a look at what is known as your administrative record and determine whether the insurance company’s denial was just or not. Depending on the outcome of your appeal, you will then be allowed to file a federal lawsuit against the insurance company.
Administrative Appeal Exhaustion
It is not until you have exhausted your administrative appeal that you will have the option of filing a federal lawsuit against the insurance company. You must file the administrative appeal within a mandatory deadline of 180 days after receiving a denial letter.
If you skip this part of the process, you forfeit your right to appeal. If they deny your appeal and the terms of your policy do not allow you to pursue a second appeal, you can only file a federal lawsuit against the insurance company.
How a Houston Life Insurance Lawyer Can Help You
When you are required to follow the ERISA laws in your appeal process for your life insurance claim, it can benefit you to seek the legal counsel of a life insurance claims attorney in Houston.
The ERISA laws are some of the most restricted regulations you must follow to file an appeal for your claim. In addition to gathering several legal documents under a tight deadline, you cannot introduce new evidence after your initial appeal.
That means that all evidence in your administrative record must be strong enough to convince an independent examiner and a potential federal judge that the court must overturn the denial of your claim.
Prove How Weak the Insurance Company’s Justification Is for a Denial
One of the ways that an experienced life insurance claims lawyer can help you is by establishing flaws within the insurance company’s decision. Life insurance lawyers can review the terms and conditions of your loved one’s life insurance policy and provide evidence of how the insurance company failed to abide by the terms of the policy.
Once an unbiased examiner investigates your administrative record, they can determine that the insurance company’s evidence for denying your claim is flimsy at best.
Collect the Best Evidence for Your Administrative Record
The ERISA laws are so complex that just collecting evidence can overwhelm you. You may know the strength of the evidence you plan to present. A qualified Houston life insurance claims attorney has enough experience with ERISA cases to know what types of evidence to use that can strengthen your record.
Life insurance claims lawyers also know how to submit all the evidence that independent examiners and federal judges need to decide in your favor.
Represent You at Your Federal Trial if Necessary
Your life insurance claims lawyer serving Houston can also prepare you for your federal trial against the insurance company, should it come to this step. Like the appeal process, your lawyer can file the lawsuit on your behalf and ensure that they present the best evidence in your administrative record throughout every step of the appeal process.
This preparation can make a difference in whether you will be successful in having your denial overturned or not.
Get Help From an Experienced Life Insurance Claims Attorney Serving Houston Today
When the insurance company denies your life insurance benefits, you need a skilled life insurance lawyer on your side to fight alongside you. The stakes are high because the future of your loved ones is on the line.
At ERISA Insurance Claim Attorneys, we have fought for the life insurance benefits of families for over three decades. Give us a call or complete our contact form for your free case review. You deserve strong legal representation when dealing with life insurance claim denials.
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