Losing loved ones can be very difficult for people. They lose the love, affection and support the loved one provided, which can be very difficult to replace. They can lose significant financial resources as well. The lost loved one may have provided a significant portion of the family’s income, and without it, life can change dramatically. One way people try to prepare for this possibility is by having life insurance so that their beneficiaries will be taken care of if they pass away.
Many families rely on these benefits to carry on with life moving forward after a loss. However, like other insurance policies, there are certain exclusions from coverage and sometimes insurance companies deny life insurance claims. This can be devastating for the family, especially if they were expecting to receive the payment and need it to stay financially afloat. It is important to know why life insurance claims may be denied to help ensure that it will not occur.
Some of the common reasons that insurance companies deny claims are:
- Manner of death: Many policies will not pay life insurance benefits if the insured died by suicide, passed while engaging in dangerous excluded activities that have a higher likelihood of death, or if the death occurred while the decedent was engaged in unlawful activity.
- Failure to pay premiums: Most life insurance policies require monthly premium payments. If these monthly payments aren’t made, the policy can be cancelled without the beneficiaries’ knowledge.
- Misrepresentations on the application: If the applicant lied about their age or failed to disclose certain medical conditions that they may have had (or conditions that direct family members have), the application can be denied. It is important that the applicant be completely honest on the application.
While the reasons stated above are valid reasons for insurance companies to deny a life insurance claim, there are also times when insurance companies deny claims without justification. Beneficiaries have the right to appeal a denial, though many don’t know this.
It is important for people in Texas to understand the policy itself and the actual circumstances that resulted in the death. If the denial was improper, the initial decision can be reversed, and the beneficiary will then receive much-needed benefits. An appeal can be complicated, though, as simply understanding all the provisions of the insurance policy can itself be difficult. An experienced insurance attorney understands these policies and will likely be a useful resource moving forward.