You file a claim as the beneficiary of a life insurance policy, which the insurance company denies. What are your rights in this situation? What legal recourse is available to you? First, you should immediately schedule a consultation with a California life insurance claims attorney.
An owner/insured of a life insurance policy who faithfully pays life insurance premiums for years has a right to expect a full payout for his beneficiary. The death of a loved one can cause financial difficulty, and rejection of a life insurance claim can be utterly devastating.
If you are a life insurance beneficiary and your claim has been denied, a California life insurance claims lawyer can determine what legal claims you may have against the insurance company.
Retaining a lawyer allows you to negotiate a settlement with the insurance company, or if it refuses to pay a reasonable settlement amount, to sue it and ask a court or a jury to order the payment of your claim.
What Happens When A Life Insurance Claim is Denied?
If you are a beneficiary who files a life insurance claim, the life insurance company may notify you of a denial by letter or phone. A phone call must always be followed up by a letter from the insurance company that explains a denial by quoting policy language and listing documents it reviewed in the decision-making process.
If the insurance company calls to notify you over the phone that it has denied your claim, make sure to request written notification of the denial indicating the date the decision was made and reasons for denial, and ask whether you can appeal the decision. In some types of life insurance policies, the insurer is required to allow you to appeal the life insurance claim denial.
What Reasons Are Given for Claim Denials?
The reasons an insurance company might give for denying a life insurance claim include but are not limited to:
1. The policy lapsed or was canceled due to a missed payment.
2. There is a policy exclusion that the insurer asserts applies to bar or limit the claim.
3. There was a material misrepresentation of fact on the life insurance application.
4. The policy was provided through an employer, and coverage was terminated when the employment ended or the employer switched to a different insurance provider.
5. The policy was for accidental death only, and the death was not accidental.
If Your Claim is Denied, Follow These Steps
When an insurance company denies a claim, it is required to send the claimant a letter spelling out in detail the specific reasons for the denial. However, life insurance companies often send denial letters that provide only vague reasons for the denial. If you receive such a letter, contact the company and request a written list of each specific reason for the denial. Also, ask how to appeal the decision. You may need to gather documents such as medical records, a death certificate, the autopsy report, and a copy of the life insurance policy.
The best thing you can do however is to contact an experienced life insurance claims denial attorney who can review your situation, the denial letter, the policy and other documents to assess your rights and how best to proceed.
How Will an Insurance Claims Lawyer Handle Your Case?
The attorney will discuss with you how the law applies to your case and will explain your options, which may include suing the insurance company. However, many life insurance policies are governed by a federal law known as ERISA and these claims require at least one administrative appeal before a designated beneficiary may file a lawsuit.
For an administrative appeal, your lawyer will present a case based on the facts and supported by the law. Even if the insurance company upholds the denial, the administrative appeal provides an opportunity for you and your lawyer to begin preparing your case for litigation.
Let an Insurance Claims Lawyer Help You Fight Back
Many insurance companies examine life insurance claims with the intent of denying claims or paying as little as possible. While some deaths genuinely warrant suspicion, many do not and a significant portion of claims made are valid. If the insurance company acts in bad faith or wrongfully delays or denies benefits, the right life insurance lawyer will be critical to you.
An insurance claims lawyer can help you avoid being taken advantage of by a life insurance company. Assessing your insurance situation accurately while you are grieving a loved one’s death can be difficult, and the right lawyer will provide the candid advice and insights you need.
Life insurance claim denial cases are often resolved quickly when your lawyer presents the insurance company with the right documents and applicable law. A well-constructed appeal letter also informs the company that you are serious and willing to litigate your claim.
What About Employer-Sponsored Life Insurance?
The Employee Retirement Income Security Act of 1974 (ERISA) is the federal law that regulates life insurance policies provided through employers, and these cases are handled by U.S. District Courts in the federal court system. If the policy you made a claim on was provided through the decedent’s/insured’s employer, you should hire a lawyer with a record of success handling ERISA claims.
However, if the life insurance policy was not purchased through an employer, a lawsuit against the insurance company will be handled by the state court system.,
The ERISA statute itself provides guidelines for how ERISA cases are handled. For example, when you sue under ERISA, your damages may be limited to the amount of your claim, and will not include bad faith or punitive damages, and your case will be heard by a federal judge as opposed to a jury. Bad faith damages are not available as a remedy. Bad faith damages are discussed more here.
What Is Insurance Bad Faith?
If the life insurance company mishandles your claim, intentionally or negligently, it may be held accountable for acting in bad faith. Bad faith may arise from an insurance company’s specific unreasonable acts or failures to act. Insurance bad faith involves but is not limited to:
1. Unreasonably delaying an investigation for no apparent reason.
2. A failure to conduct a reasonable investigation of the claim.
3. Unreasonably denying a claim for false, fabricated reasons or without an adequate basis for doing so.
4. Tricking or intimidating a claimant to take a settlement offer for less than the claim is worth.
Bad faith damages include emotional distress damages, financial distress damages, consequential damages, attorneys’ fees, and possible punitive damages.
Bringing the Matter to Its Best Possible Conclusion
Your lawyer may ask the insurance company to produce all documents it has that are pertinent to your claim, and may depose or subpoena claim representatives of the company.
Your claims denial lawyer may also ask an insurance industry expert to make a statement or testify on your behalf regarding reasonable life insurance procedures and practices. The right attorney will do what it takes to bring the matter to its best possible conclusion.
If your life insurance claim has been wrongly denied or delayed because an insurance company is acting in bad faith or is simply trying to avoid paying an ERISA life insurance claim, you should contact a highly experienced California life insurance claims lawyer who will help you obtain the life insurance benefits you deserve.