Many people purchase life insurance to ensure their loved ones are financially protected when they pass away. A claim for payment under the policy may be denied, however. The beneficiaries of the policy may have an opportunity to appeal.
Life insurance overview
A life insurance policy is purchased by an individual who is usually required to provide information about their health and lifestyle. If they meet the insurance company’s criteria for coverage, it will offer them a policy and state how much the policyholder will pay in premiums each month.
Once the policyholder passes away, the beneficiaries can file a claim for payment. The life insurance company can deny payment for several reasons, including that the policyholder misrepresented information on the application, for non-payment of premiums which caused the policy to lapse, and failure to disclose pre-existing medical conditions that contributed to the policyholder’s death.
It may also be denied if the life insurance company states there was policy fraud, such as submitting false documents or if the policyholder’s cause of death is specifically excluded from the policy.
If the claim is denied, the beneficiaries can appeal. First, they will want to review the denial letter from the insurance company. It may be necessary to provide additional documentation, such as medical records or the death certificate.
The beneficiaries can submit a written appeal and should be prepared to demonstrate how the claim meets the coverage in the policy. If the appeal with the insurance company is not successful, it may be necessary to resolve the issue in court.