Why Was My Life Insurance Claim Denied?

Why Was My Life Insurance Claim Denied?

Why Was My Life Insurance Claim Denied?

Has Your Life Insurance Company Denied Your Claim?

You can’t believe the news: Your loved one has suddenly died.  A few weeks later, you can’t believe the news, again: the life insurance company has denied your claim. The life insurance company refuses to pay even the small policy benefits – $25,000 – to you and the other beneficiaries.

Has The Life Insurance Company Used The Term “Recission” To Deny Your Claim?

What kind of a life insurance company would refuse to pay a small policy, knowing the insured person is gone?  The answer to a life insurance company claims denial, even a small but important policy, is based on the life insurance rescission law in California.

A Life Insurance Company can seek to rescind a policy in California based on policy application misstatements (false representation)  if the policy falls into the two-year contestability period when the person whose life was insured has died.

  • In California, a life insurance policy is generally considered “incontestible” two years after it is issued, or the application is filled out.  Incontestible or incontestibility is a law and legal doctrine intended to provide some added certainty that a life insurance policy will be paid.
  • Incontestibility requires that after two years, a life insurance company no longer has the right to refuse or deny a claim (or rescind a life insurance policy) based on a “misrepresentation” in the life insurance application.
  • Unfortunately, life insurance companies have turned the incontestibility law upside down, taking the law to give them a wide territory to rescind and deny life insurance claims on policies that have been in force less than two years.
  • In fact, the life insurance companies that sell these smaller policies use the incontestibility law in just this way. To save money – their money – these companies don’t do much or anything to investigate a life insurance application.
  • They are just interested in getting the business, and accepting the money for the premium.  If a person loses their life in the first two years of the policy, for a medical reason, only after a claim comes in, will the life insurance company perform its investigation.

Has The Life Insurance Company Used The Term “Misrepresentation” To Deny Your Claim?

After a claim comes in, the investigation is all about trying to find a “misrepresentation” on the application, so the life insurance company can rescind the life insurance policy, as if the policy had never existed.  The life insurance company will send back the comparatively small amount of premium paid, instead of paying what the insurance was intended to cover in the first place –peace of mind, if the worst happened.

A Life Insurance Company Is Required To Treat You In “Good Faith”

Here’s a great article on the rights on the insured. As you will see,

You are legally entitled to be treated in “good faith” by your insurance company and its representatives at all times. This means your insurer must be considerate of your needs. It must communicate fully and honestly with you about the policy it sold you and about rights and duties relating to your claim.  In turn, you are legally obligated to be honest and to cooperate with reasonable requests for information relevant to your claim. Cal. Insurance Code sec. 790.03 is the main place to read these requirements. They’re also included in portions of Cal. Insurance Code sec. 2071.”

A Claims Denial Is No Reason To Consider Your Case Closed.

To us, it’s the start of a process that will get your claim paid. But the insurer wants to to see it as final, and to therefore give up your efforts. That way, they get to keep YOUR money – which was their goal in the first place.

If you have a problem getting your life insurance claim paid, or your policy has been rescinded, denied or has other issues on it, you need to contact Life Insurance Lawyer NOW.com or life insurance justice.com NOW.  Use the form on our site, or email us, or call (888) 997-4070 or (818) 937-0937 to speak directly to an experienced life insurance lawyer.  We are the best life insurance lawyers around, and we are real lawyers, not a lawyer referral service or “middleman”, we are here for you NOW.
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