What Lab Results Can Cause Life Insurance Denials?

January 12, 2024 | J. Price McNamara
What Lab Results Can Cause Life Insurance Denials?

Insurance companies are in the business of pricing risk, and when they sell life insurance policies, they take on the risk of the policyholder’s death. They are doing their best to estimate the policyholder’s remaining lifespan so they can charge premiums appropriately. If insurance companies misprice the risk, they can suffer losses. Thus, they rely on the information they learn from the policyholder during the application process.

Insurance companies can learn later that there were inaccuracies in the policy application and may have the right to investigate depending on when the policyholder dies. In particular, they may review toxicology and autopsy results because these tests can reveal something at odds with what the policyholder told them. Insurance companies may deny paying the benefits entirely because they have found that the policyholder lied at the time of the application.

If the insurance company has denied your life insurance claim, you should immediately contact a life insurance attorney in Houston. Life insurance companies can sometimes be too aggressive in denying claims, and they can make mistakes. Sometimes, you can successfully sue insurance companies to force them to pay the death benefit.

The Insurance Company Conducts a Thorough Investigation at the Time You Apply for the Policy

Life Insurance

Insurance companies have already reviewed your application at the time you applied. One thing they do is compare what you have said on your application against information that they find in the Medical Information Bureau. This source contains data from previous life insurance applications and will show diagnoses and surgical procedures. Insurance companies may report it to the MIB if you lied during the application process.

In addition, the insurance company may also check databases for any prescription medications that you take. Although you should have reported your prescriptions at the time of your application, insurance companies may find other prescriptions you still need to report. They can also learn about different health conditions and may even have access to a database of lab tests. Insurance companies may price the policy differently or deny coverage altogether if they find additional health problems.

The Insurance Company Has More Recourse When the Policyholder Dies in the First Two Years of the Policy

The policyholder is far from home-free if the insurance company does not learn of a health condition or material fact during the application process. Every insurance policy contains a contestability clause, which allows the insurance company to deny claims during the first two years of the policy under certain circumstances. The contestability period begins on the day the policy starts, and if there is a lapse, the contestability period will begin anew once it restarts.

The contestability period is a matter of policy because if the policyholder can get away with misrepresentations on their application, seemingly everyone will try it. The period is a way for insurance companies to police misconduct. Otherwise, they will charge far too little in premiums, and they can end up insolvent. Then, others cannot rely on the insurance company to pay the death benefits they need.

Insurance companies are particularly stringent about paying benefit claims within the first two years of the policy. They believe they had thoroughly investigated the insured’s health when the policy began to price the risk appropriately. They set the premium based on their belief about the insured person’s health and rely on the statements the insured makes when filling out an application.

Insurance companies will want to know that the insured individual did not lie when obtaining insurance. One of the significant consequences of lying on an insurance application is that the insurance company can refuse to pay the claim for benefits. If the policyholder died within the first two years of the policy, you can expect the insurance company to want to know more and investigate the death further.

Insurance Companies Do Not Hesitate to Deny Claims

Suppose the cause of death shows that the insured lied about their health at the time of the application. In that case, the insurance company may deny the life insurance benefits that beneficiaries were expecting to receive. These cases often result in contested lawsuits, where the family must fight for benefits in court.

Always remember what insurance companies can do when money is on the line. They know that a family needs the benefits, and while insurance companies must operate by principles of good faith, they may also deny a claim when they have the chance and a credible argument to make. Then, the onus is on you to get a lawyer and take legal action against them.

Insurance Companies May Investigate When They Believe that There Was a Falsehood

Insurance companies have greater latitude to conduct more investigation when the insured dies within the first two years of the policy, and this time is known as the period of contestability. Every life insurance policy contains language that allows the company to review your application for misstatements in the first two years of the policy.

Lab Results

When the insurance company believes that the policyholder may have lied on the application or that the policy should have excluded the death, they have the right to investigate. This right is only during the two-year contestability period. The insurance company may review the following:

  • The death certificate – this will confirm that the policyholder died and will list the cause of death.
  • A toxicology report – the life insurance policy may have an exclusion that will not cover deaths related to drugs.
  • The autopsy report – the family will be required to submit the results of the autopsy report if the death happened during the contestability period. The insurance company will learn the actual cause of death in this report.
  • The coroner’s report – the coroner will investigate in the event of an accidental death.

You should be prepared with documentation of your own in case the insurance company is performing an investigation because it will find a way to deny your claim. Be ready to fight back and immediately speak with a lawyer.

Some Policies Have an Incontestability Clause After Two Years

The situation is different once the contestability period ends. Insurance companies have no right to conduct this type of review, and while it is rare for them to deny a claim outside the contestability period, it does happen sometimes. Again, insurance companies are constantly looking for ways to avoid paying claims.

There are differences in the language of specific policies. Some may have an incontestability clause that keeps the life insurance company from challenging a claim after two years, whereas others do not. In that event, insurance companies may have the right to deny a claim based on what they believe to be fraud. The family will not have to submit the same level of documentation, but the insurance company can still tell if it’s fraud from the cause of death. For example, if someone put down the fact that they were a non-smoker and died of lung cancer, the insurance company may try to deny the claim for benefits.

Insurance Companies May Wrongfully Deny Claims

Even when insurance companies seemingly have a reason to deny a life insurance claim, they may not always be correct. They often seek ways to deny a claim and may stretch things too far. However, the court may see things differently than the insurance company, and you can get the benefits.

You should always call a lawyer when an insurance company denies your claim. Your lawyer will investigate the facts and circumstances and determine whether you may have legal options to fight back.

Just because insurance companies state something does not mean that they are automatically correct. They can make mistakes or take things further than they should to try to save themselves money. Insurance companies may figure you will go away because they claim to have caught your loved one in an untruth. They may be trying to push you around, knowing they can force you into a settlement where you get less than you deserve.

Life Insurance Denial

Your lawyer can review your options and see whether there is a way for you to fight back. First, even though insurance companies have test results, they are only sometimes accurate. Your family can challenge the testing methods and the evidence used to deny your claim. Your lawyer may order your own tests to see if they reached the same result as the ones conducted by the insurance company.

In some cases, insurance companies may be overstating the significance of what they have learned. The misstatement does not have to be related to the cause of death for the insurance company to deny the claim. However, some misstatements may have been minor. Had the insurance company known the truth at the time of the application, it may not have denied coverage or priced the policy any differently.

Life Insurance Companies Cannot Wrongfully Refuse to Pay Your Claim

It is essential to realize that you can fight back. A life insurance policy is a contract between you and the insurance company where each one of you has obligations. While you must pay your premiums and be truthful on the application, the insurance company must pay a claim when the policy terms cover the death.

If the insurance company is wrongfully refusing to pay a claim, you can file a lawsuit for breach of contract. The court will review the circumstances of the case and determine whether the life insurance company must pay the claim. Families have defeated life insurance companies in court when they have hired a lawyer and stood up for themselves.

How a Life Insurance Lawyer Can Help You

You need a life insurance lawyer to help with your case immediately. An experienced attorney can do the following for your case:

  • Investigate the facts of your case to help develop your side of the story
  • Obtain evidence that may show the insurance company was incorrect
  • Communicate with the insurance company on your behalf throughout the dispute
  • File a lawsuit against the insurance company, seeking to force it to pay the claim
  • Negotiate a possible settlement with the insurance company that resolves the dispute

It Costs You Nothing Out of Pocket to Hire a Lawyer

Life insurance recovery lawyers will not ask you to pay them anything upfront. Your lawyer signs a representation agreement with you stating they will work on a contingency basis, meaning they only receive payment if the insurance company pays some or all of the death benefits it previously denied. Then, you use some of the proceeds from the recovery to pay your lawyer, and if you do not recover any money, you do not have to pay your lawyer for their time.

Never Wait to Consult a Life Insurance Claims Attorney

life insurance claim denial can be a distressing experience, especially during times of loss. If you find yourself in this situation, consulting with a life insurance attorney today is a crucial step toward understanding your options and navigating the complex appeals process.

Life insurance policies are legal contracts, and disputes may arise for various reasons, such as alleged policy violations or ambiguities in the terms. A knowledgeable life insurance attorney can review the denial letter, assess the grounds for denial, and provide insights into the potential avenues for contesting the decision.

Life insurance attorneys are well-versed in insurance laws, policy language, and the intricacies of the life insurance claims process. They can work on your behalf to gather evidence, communicate with the insurance company, and build a compelling case to challenge the denial. Whether the denial is based on alleged misrepresentation, lapse in premium payments, or other reasons, an attorney can identify your rights and pursue a fair resolution.

Time is often of the essence in life insurance claim disputes, and a prompt consultation with an attorney allows for a timely evaluation of your case. Whether negotiating with the insurance company or pursuing legal action, a life insurance attorney can be your advocate, striving to secure the benefits you are entitled to during a challenging and emotional time.

J. Price McNamara Author Image

J. Price McNamara


Losing my own brother, then my father and sister after long, disabling illnesses just a few months apart drove a career change for me. Before that experience, I never truly understood the place you’re in. I never understood the dramatic impact that receiving (or not receiving) the disability and life insurance benefits you paid for and counted on can have on your life especially when you need to focus on family and healing. What I experienced with my own family now drives the way I view my clients and my work, and I will never forget it!

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