On behalf of Faricy Law Firm, P.A. posted in blog on Friday, January 5, 2018.
When a loved one spent years paying on a life insurance policy, you expected to receive the proceeds upon his or her death. When he or she eventually passed away, you made a claim for the proceeds, but the insurance company denied it.
What happened? You know that your loved one paid the premiums on time, and your loved one never received notice that the policy was canceled or otherwise invalid in some way.
Denials often reside in the fine print
Life insurance companies are in business to make money. If the company can find a way to deny your claim, it will more than likely use it. Most policies include exclusions, which are certain circumstances under which the company may deny a claim. Many people believe they found a "great deal" on a policy because its premiums are lower than others they researched. This could mean the policy contains numerous exclusions.
Like other contracts, the exclusions in life insurance policies often reside in the fine print. Some common exclusions include the following:
- The company can contest a claim based on an omission from the application. For instance, if your loved one failed to mention his or her blood pressure when applying for the policy, your claim may end up denied on this basis even if the cause of death had nothing to do with blood pressure.
- The policy may contain an exclusion for death in a private plane but not a commercial aircraft.
- Most people are familiar with the exclusion regarding suicide. If this type of tragedy occurs within the first two years of the policy, you may receive a refund of premiums but not a payout of the policy limit.
- If your loved one died during a "dangerous" activity, your claim could result in a denial.
- If death occurred during an illegal activity, even something as potentially innocuous as trespassing, the company may use that fact to deny a claim.
- The policy could also contain a clause regarding whether your loved one was under the influence of drugs or alcohol at the time of death.
Other exclusions may be contained in the policy your loved one left to you.
A denial may not be the end of the story
Even when an insurance company attempts to deny your claim based on an exclusion, you may still have options. It might be possible to appeal that decision. Whether your loved one's death falls under an exclusion may be subjective. Providing the proper evidence that it does not could result in you receiving the proceeds from the policy. It may benefit you to understand your legal options under these circumstances.