Life Insurance Claims Denied When Insurers Fail to Send Lapse Notices – Beneficiaries Beware
The State of California has filed a lawsuit against Transamerica Life Insurance Company, American General Life Insurance Company, Lincoln Benefit Life Insurance Company, Everlake Life Insurance Company and other life insurers for failing to comply with State Anti-Lapse regulations — Insurers Fail to Send Lapse Notices. (People of the State of California vs American General Life Insurance Company and others, 2024).
Life Insurance Claims Beneficiaries Beware
All life insurers who sell policies to California residents have to notify the policyholder in advance of cancelling a policy and inform the owner the policy may lapse. The insurer has to allow a policyholder 60 days to get caught-up on the premium. The effect of life insurers not properly notifying policyowners that their policy could lapse has likely caused millions of dollars to be denied from valid life insurance claims in California. That’s what the State is alleging.
The State of California has accused Transamerica Life Insurance Company, American General Life Insurance Company, Lincoln Benefit Life Insurance Company, Everlake Life Insurance Company and others of:
“…they have each failed to provide full 60-day grace periods where required, and in many cases affirmatively misrepresented the amount of grace consumers were entitled to. Defendants have also failed to provide full and proper written notice to consumers of pending lapses or terminations, and/or they have failed to regularly inform policy owners of their right to designate a third party to receive notices of lapse.”
“Defendants have then terminated, wrongfully, thousands of California policies for nonpayment of premiums despite the anti-lapse statutes expressly prohibiting this.”
The legal action by the State was made in 2024 but the violations it alleges go as far back as 2013.
This means that if you have a life insurance claim that was denied by Transamerica, American General, Lincoln Benefit or any of the other insurers named, you may still be able to get your claim money. Even for claims that were denied as far back as 2013.
If you’ve had a life insurance claim denied by Transamerica Life Insurance Company, American General Life Insurance Company, Lincoln Benefit Life Insurance Company, Everlake Life Insurance Company or others and you live in the State of California contact us now to determine if you have a valid claim that can be recovered.
Phone: (888)428-4868
Notice of Lapse for Life Insurance Policies in California
All life insurance policies that are sold in California have a 60-day grace period. Some old policies say the Grace Period is only 31 days but the State statute overrides that and all policies – term, whole life, variable – are protected from lapse for 60 days.
A life insurance company has to notify the policy owner that their policy is in danger of lapsing before it can cancel the policy. The lawsuit being brought by the State of California against Transamerica, American General and the others indicates it has evidence that these life insurers were not honoring this requirement.
We get calls on a regular basis from people saying their policy lapsed and they didn’t even know it until after the fact.
Secondary Notification Mandatory by Life Insurers
Another consumer protection required by life insurers for policyholders in California is to offer the policyowner the ability to name a second person to receive notices when the policy is at risk of lapsing. Insurers must give this opportunity to the policyholder each year. The way the offer is made is in writing mailed directly to the policyholder’s address. If an insurer hasn’t complied with this rule they’ve violated the California statute.
What we see quite often is that someone holds a life insurance policy for many years and believes it’s in good standing. When they die their family tries to make a claim but the insurance company shuts them down and tells them the policy lapsed and there is nothing to claim.
It’s all connected:
- Insurers Fail to Send Lapse Notices to the policyholder and proper notification while they’re alive.
- The policy lapses without the owner even knowing because they weren’t given the proper warning and lapse notices by the insurer.
- Then, the insured dies.
- The family tries to file a claim but the insurer pushes them away.
- The family is left with nothing.
- And they can’t get any answers from these insurers because they weren’t the owner of the policy.
It’s incredibly frustrating.
We’re here to help all life insurance claims beneficiaries collect what they’re owed. The State of California, with this new lawsuit, has made our work a little easier.
Call us now to recover your Life Insurance claim if you were told the policy lapsed before the insured died.
Locating Families of Insureds After Death
Another violation asserted in the State of California lawsuit is one we’ve been writing about, talking about, and helping our clients recover money from for nearly a decade. The Unclaimed Life Insurance and Annuities Act of California.
Life insurers must check their policyholder lists against a national list of deceased people to determine if they have any outstanding death benefit payments owed to families. It’s a list know as the master Death File and insurers have been sued across the country for violating this rule.
For decades insurers failed to look into whether their policyholders had died before their policy lapsed for nonpayment. Because, of course, if you’re dead you’re not going to be paying life insurance premiums.
In many instances the policyholder had died and the insurance company simply cancelled the policy for lack of premium payment. All the while the insurance companies had access to a list of all persons who’d died during any given year. When States discovered that insurers were not making any effort to cross check their lists of policyholders against the Master Death File, significant litigation followed and billions in penalties were handed out.
According to this new suit by the State of California, many insurers are still violating this rule and simply daring beneficiaries to sue them. This opens an insurer to significant penalties, if liable, even on a one-at-a-time basis.
The Complaint reads, “Defendants, in other words, are refusing to act or disclose key information to consumers as required by the act, hoping that consumers will remain in the dark about their potential claims to valuable life insurance benefits that their family members typically spent years paying for and hoped would be there for their family upon their death,” the complaint claimed.”
Get Our Help for Your Life Insurance Claim Now
The suit calls for the court to issue an injunction against the defendants to prevent the companies from allegedly violating the insurance code statutes and the act, restitution, civil penalties, interest and attorney’s fees and costs.
This means that as a victim of any of these insurance company’s bad behavior you’re not entitled to any direct benefit of the lawsuit. Therefore, you need our firm representing you to fight for what you’re owed and get your claim paid.
The Center for Life Insurance Disputes has helped our clients recover hundreds of millions of dollars from life insurance claims. This is our sole business. Our fees are very low and we do not require any money up front from our clients. If you need help with a life insurance claim you need to speak with us.
Call: 888-428-4868
Ref. Law article.
Ref. Insurance article.