Life Insurance Claim is Denied – Fight Back
No one expects their life insurance claim to be denied but when it happens — and yes, it does happen — you need to know what to do. Here we explain in simple terms what to do if your life insurance claim is denied – based on more than thirty years of life insurance claims handling experience.
The difference between an appeal of a life insurance claim and a lawsuit for a life insurance claim is significant. An Appeal is when you take your argument directly to the insurer. Based on whatever facts are presented, the insurer may reconsider and pay the claim or stand by their original denial. The facts presented in an appeal need to be strongly in favor of the claim.
A life insurance Lawsuit is when your attorney and the attorney for the insurer file legal arguments in a court and ultimately the decision to pay or deny the claim is made by a judge.
Ways To Fight a Denied Life Insurance Claim
#1. Self-Appeal
A claimant can do their own appeal of a life insurance claim denial. When you self-appeal a death claim denial you must present substantiation for why the claim should be paid. Use the Claim Denial Letter as a roadmap.
The insurance company is only interested in material facts that substantiate the appeal of your death benefit claim. You must present your argument in writing, document everything, and submit it to the appeal committee.
#2. Hire a Life Insurance Claim Specialist to Appeal for You
If you don’t feel knowledgeable enough to do your own appeal then retaining a firm such as The Center for Life Insurance Disputes to do a full investigation and formal appeal is the best option.
A professional claim specialist knows how the claims process works and can look for new evidence that proves a life insurance claim should be paid. They’ll take their findings right to the insurance company and present the facts in a way that satisfies the claim approval requirements.
They’ll get every piece of important information such as medical records, photos, site inspections, police reports and more, and do a thorough reconstruction of the issuance of the policy and the claim investigation. When the insurer gets this level of evidence they know they have no choice but to pay a claim.
#3. Hire a Lawyer to File a Lawsuit
When hiring a lawyer to file a lawsuit be sure he or she specializes in life insurance.
If the claim amount is big enough, and you have a good argument, many attorneys will accept your case on a contingency basis. This means you will not have to pay any money to the attorney unless they are successful.
Successful in a lawsuit usually means the case settled or a judgement to pay was ordered by a judge. In 9-out-of-10 life insurance lawsuits the case will settle for approximately 50% of the death claim amount. You will pay the attorney 30% to 40% of the settlement. A life insurance lawsuit typically takes 18 to 24 months to resolve.
#4. Contact the State’s Department of Insurance
Depending on why the claim was denied, a State’s Insurance Department may be able to intervene.
#5. Follow the Prompts in a Google Search AI Result
Assistance from Gemini, ChatGPT and Anthropic offer guidance on forming a death claim appeal. While this can’t take the place of a seasoned expert, it can offer useful suggestions.
What If My Life Insurance Claim Was Denied?
When a life insurance claim is denied the beneficiary will receive a letter stating the reason for the claim denial. The information in this letter is important. It offers a place to start in terms of what we have to focus on in our appeal.
Denial letters are usually quite specific. They’ll tell you exactly which application question they’re challenging and the documents they’ve found that support their denial. If you receive a denial letter that simply says the insurer is denying the claim without any specific reason why, the insurer may be violating fair claims laws.
In addition to the denial letter the original application is important to have. It’s always found in the back of the policy. The application gives the exact wording of the questions the insurer is challenging. The questions have to be looked at carefully because in some cases questions are vague or their meaning isn’t clear. Demonstrating that a question wasn’t understandable can sometimes be enough to get a denied claim overturned and paid. Whether the wording is unclear or not, the original application is critical to fighting a denied death claim.
The denial letter and the application will get things started. Then you have to decide which path to take to challenge the denial. Appeal or lawsuit?
Common Reasons Why Life Insurance Claims are Denied
There are many reasons why life insurance claims are denied. As national experts in life insurance claims we speak to hundreds of beneficiaries every year and we see many situations where claims are wrongly denied. Such as:
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The Policy Lapsed
In some cases a life insurance policy lapses shortly before the insured dies. There are many reasons why this can happen but as a protection to policyholders they have to be notified that their policy is going to lapse before it happens. If the insurance company doesn’t warn them ahead of the lapse, the policy has to be considered still in good standing.
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Medical History Wasn’t Admitted on the Application
Here is the number one reason for a life insurance claim to be denied. Insurance companies love to make this argument and that it’s always the fault of the insured. In our experience when medical information wasn’t admitted on the application and it causes a life insurance claim denial, there’s more to the story.
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Premiums Weren’t Paid
The payment of life insurance premiums is not exact. In fact, it’s rarely a manual effort and mistakes happen frequently. Knowing where to look and how to uncover responsibility is important to get a policy reinstated and a claim paid after a denial.
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Criminal Background
Most insurers have guidelines against offering policies to persons with criminal backgrounds. But, the guidance doesn’t rule out offering a policy. Rather, it sets some limitations. Each situation is unique and all facts have to be evaluated when it comes to a life insurance claim being denied for a criminal background. Insurers rarely go through this effort.
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Recreational Drug Use
Recreational drug use in the US is very common. Something as insignificant as a note in a medical record about using a controlled substance can cause a denied life insurance claim.
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Tobacco Use Not Disclosed
Someone who smoked only in social events or who smoked a cigar at a bachelor party could be labeled a tobacco user by an insurer causing a denied life insurance claim.
Life insurance claims are complicated and the deck is stacked against consumers. Most claims are denied after a claim investigation is conducted by the insurer. But, how much detail does the investigator get before denying a claim? How far do they take an investigation? And, who are they working for? When important information is missing from a claim investigation the result can be a denied life insurance claim.
The Value of a Life Insurance Claim Investigation
A life insurance claim investigation has to be fair and thorough.
A fair and thorough life insurance claim investigation means all relevant information is evaluated. Not just enough information for a claim to be denied, but all relevant information. This may mean that interviews have to be conducted or on-site inspections of accident scenes have to be done or statements have to be taken from related parties. A beneficiary is entitled to have their life insurance claim fully vetted before a denial is warranted.
This doesn’t always happen. Life insurance companies know how to avoid paying claims and they’re not in the business of advising beneficiaries how to get a claim approved.
It’s estimated that $1.4 billion of life insurance claims get denied every year. Nearly every time a claim is denied the insurance company states that some information on the original application was answered wrong — and it’s always the fault of the insured.
It could be that a medical question wasn’t answered correctly – which is the most common reason for a denial – but it could also be that the insurance company didn’t do a thorough job of examining the medical records.
It could be that the insured didn’t get fair treatment by the agent when they applied.
On and on, there are so many reasons a life insurance claim gets denied that aren’t the fault of the insured. We know this and we fight tooth-and-nail for our clients money.
How to Prepare a Denied Life Insurance Claim Appeal
Whatever the reason, as the beneficiary of a denied life insurance claim you need to know what your options are and what it will cost you to fight the denial and get your money.
To Appeal a life insurance claim you’ll need to:
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Gather evidence that supports your claim.
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Write a single paragraph stating your intent to appeal the denial.
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List every bullet point that supports payment of the death claim.
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Write a detailed paragraph explaining each bullet point.
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Present the Appeal to the insurer.
Life Insurance Claim Mistakes
When you submitted your life insurance claim you probably assumed the insurance company was working on your behalf to process and pay your claim. If your claim was denied you now know this wasn’t the case. When an insurer receives a death claim they’re working for their best interest, which is to keep as much of their money as possible. If you want to appeal your claim denial don’t make the mistake of doing it yourself. Get professional help.
Professional help means having representation that knows what they’re doing. If it’s a professional appeal, make sure they have experience and have been successful in appealing claims. If it’s a lawyer make sure they have specific experience with life insurance. It won’t help you to work with an attorney who specializes in disability claims or auto claims. Those are different types of insurance.
Life insurance is a specialty. Be sure you have the best experts working for you.
The Center for Life Insurance Disputes represents beneficiaries of denied life insurance claims and get their claims paid. We have years of experience with all sorts of reasons that claims have been denied and how to overcome those denials. We use our access to claims manuals, experts and industry knowledge to get our clients’ claims paid.
If you have a denied life insurance claim we’ll start with a free consultation. Then we’ll take the reins and do everything necessary to get your claim paid. If for any reason we aren’t successful you’ll owe us nothing.
Steve C. Burgess and The Center for Life Insurance Disputes have recovered more than $250 million for clients with denied life insurance claims. Call for your free consultation.
Contact us: 888.428.4868
Also Read:
What to Do when Insurer Wants to Pay the Wrong Beneficiary
Six Reasons Your Contestable Death Claim May Not be Contestable
$12 Million Claim Paid to Our Client
$850,000 Paid to Our Client from Lapsed Policy
