Life insurance policies help the bereaved beneficiaries move on with life without financial challenges after a dependent or breadwinner passes on. Insurance companies should facilitate a smooth transition by submitting the deceased’s dues to their beneficiaries.
The last thing you’d want to deal with when grieving is unreasonable excuses from an insurance company, aimed at delaying, denying, or avoiding paying benefits. Fortunately, you can contact attorneys in Anchorage Alaska to get the justice that you deserve.
Common Delay or Denial Tactics Used by Insurance Companies
Most insurance companies cite convoluted policy provisions full of legal jargon and written in ambiguous language. But did you know that those provisions are meant to make you believe that you don’t have a legal claim when you have?
Insurance companies resort to misinterpreting the applicable law or policy language when you insist on the claim and that’s legal counsel or representation is important when pursuing a life insurance claim. The common delay or denial tactics used against by life insurance beneficiaries include:
1. Alleged Misstatements in the Policy Document
Insurance policies usually have a contestable period – covering a period of 2 years from the effective date of the policy. The insurance company can dispute the validity of a policy if the policyholder dies within those 2 years through suicide, or they had misrepresented their health status or condition.
The contestable period is a window where insurance companies establish the authenticity of the information provided by the insured. Any misrepresentation detected during this period will invalidate or makes the policy null and void–meaning the beneficiaries lose any accruing benefits.
The insurer can’t contest after the expiry of the contestable period and the policy is then considered “incontestable”. Minor, unintentional, and inconsequential errors that result in misrepresentation are not sufficient reasons to invalidate the life insurance policy during a contestable period. Also, non-intentional misstatements can be cited to avoid a claim even after the expiry of the contestable period.
2. Cause of Death is not Within the Provisions of the Policy
Insurance policies typically include exclusions or exemption clauses for certain deaths, including:
- Suicide deaths;
- Intoxication-related deaths;
- Death resulting from illegal activities;
- Deaths caused by acts of war or riot;
- A death resulting from dangerous activities and sports.
Exclusion clauses can be ambiguous and the provisions can even conflict with each other at times, but life insurance companies still cite them to avoid legitimate claims.
3. Citing Premiums Default
Defaulting to pay the premiums potentially lapses the life insurance policy and insurance companies commonly cite that even because they know that you have no way of knowing the truth, particularly if you’re not legally represented.
Beneficiaries must be shown the premiums remittance statement, including evidence of premium notices sent to the policy holder’s correct address. Additionally, the premium notices should specify that failing to [pay premiums will lapse the policy.
4. Citing Failure to Submit a Coverage Application
Group life insurance policies are common among employed people and the employer is responsible for educating the employees about the benefit of the policy, submitting relevant employees’ information to insurance companies, issuing the relevant documents to the covered employees, and paying premiums.
Some employers misrepresent employees’ information or fail to submit premiums or required documents/ information from the covered employee, invalidating the life insurance policy. The employees, in this case, lose the money meant to pay premiums to the employee while the beneficiaries lose their rightful dues thanks to the negligence of rogue employers.
Employees who all along believed that they were covered are caught unaware when they visit their insurer. The employee can file legal action against the employer if they fulfilled their obligations to secure coverage, even when the employer omits certain crucial facts about the policy.
A waiver of premiums suspends payment of premiums if a policyholder is disabled due to an injury or becomes critically ill. Employers should inform the covered employee how to get a waiver of premiums on their life insurance policy. Unfortunately, some employers continue collecting premiums and fail to submit the same to the life insurance company.
Employees may never discover their employer’s vices, and it will only be discovered when the beneficiaries file a claim–insurance companies are very quick to cite a lapsed policy thanks to unpaid premiums in such cases.
How Can a Lawyer Help?
Legal advice can be invaluable when purchasing a life insurance policy. A lawyer will inform you about the whole process of purchasing the policy and how to approach or engage the insurance company. Besides legal advice, the lawyer can liaise with the insurance company and spare you the stress involved in the purchasing process.
You might need to involve a legal expert from the onset or when purchasing the life insurance policy because your beneficiaries may be denied the benefits even when the claim is legitimate. Insurance companies do all they can to avoid liability and increase their profit margins.