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Reasons why a life insurance company may deny your claim

A couple of weeks ago, we wrote a post about how insurers can justly deny your insurance claim. There are many ways they can do this, just as there are many ways that insurance companies will try to unfairly deny your claim, an act that is the very definition of bad faith in this context. Today, we're going to extend that discussion to life insurance policies, talking about how insurance companies will justly deny a person's claim.

There are four main ways that a life insurance company will deny your claim:

  • The contestability period. We've written about this before. If the death occurs during the contestability period, which usually spans two years after the policy is agreed, then the insurance company can deny the claim while they investigate the policy and the circumstances of the death fully.
  • The death wasn't covered in the policy. This can happen if the person died during a dangerous event, such as participating in extreme sports. Even dying in a war can be a legitimate reason for a life insurance company to deny a claim.
  • The information you revealed wasn't correct or you failed to provide relevant information. Honesty is the best policy when it comes to applying for insurance -- especially life insurance.
  • You failed to keep up with the policy premiums. If you let the premium on your policy lapse, then the life insurance company may deny your claim under just circumstances.

Source: United Policyholders, "4 most common reasons why insurers deny life insurance claims," Emmet Pierce, Accessed Oct. 4, 2016

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