When Are You Fully Vested in Your ERISA Retirement Benefits?

You work hard for decades to save for the future, including retirement. You may work to contribute to an employer-sponsored retirement plan or to ensure you have a solid pension before retirement age. The last thing you want or expect is to be denied the benefits you worked so hard to earn. Yet this happens all too often. Employers and their retirement plan administrators will deny your claim for benefits for any number of reasons, including both legitimate and improper reasons.

McKennon Law Group PC can help you with your ERISA pension claim. We will fight to recover the ERISA benefits to which you are legally entitled. The knowledgeable and experienced attorneys at McKennon Law Group PC know how to aggressively seek recovery of your retirement benefits, as well as life insurance, health insurance and disability insurance benefits, so that they are paid. We stand up for you against insurance companies that are denying your insurance claims and against ERISA plan administrators who deny your retirement benefits.

Unfortunately, it is not always apparent to you when your situation involves issues that a lawyer can help with. Learn more about your rights under ERISA below so you can recognize when it is time to reach out to McKennon Law Group PC.

What Is ERISA?

ERISA is the Employee Retirement Income Security Act of 1974, the federal statute that provides standards for plans and employers that provide employee benefits such as pension and retirement plan benefits as well as disability, life, health and accidental death insurance benefits. ERISA does not require employers to provide these plans, but any employer that does provide such a plan must follow the minimum requirements as stated in ERISA.

What Does Vested Retirement Benefits Mean?

To say that you are fully vested in retirement benefits means that you are entitled to those benefits and that they cannot be taken away from you. If you are partially vested, you are entitled to a portion of the benefits that are vested. Benefits typically vest over time while working for your employer.

ERISA and ERISA retirement plans control how long and under what circumstances retirement plan benefits fully vest for participating employees.

Vesting for ERISA Benefits

An important ERISA rule is that you are immediately fully vested in your contributions to a retirement plan. Your employer may not withhold pay to put it into your retirement plan only to then keep you from accessing that money.

However, specific rules and ERISA plan terms dictate how you can access your contributions in each type of retirement plan. It is not as simple as withdrawing money like you do from your bank account. Because most pre-tax contributions are not taxed, you will likely owe taxes on any money you withdraw from the plan. The IRS may also impose withdrawal penalties if you take out money before you reach retirement age.

You may be able to borrow from your retirement savings account in some cases. Check with your plan provider or employer’s benefits office to find out what types of loans they allow. For example, some plans allow loans for buying a home or funding college expenses, which you may repay via an installment plan, with interest paid to your retirement account.

Your employer also may contribute to your retirement plan. For instance, employers that offer 401(k) plans may match contributions up to a limit. You might contribute 5 percent of your salary to the plan, and your employer contributes 3 percent.

It is important to understand that when your company provides retirement benefits, you are not necessarily immediately vested in those benefits, and you likely will not have an immediate right to them.

Depending on the plan and how your employer funds and provides benefits, it may take years to become fully vested. However, ERISA provides limits on how many years vesting can take, which keep employers or plans from making it impossible to become fully vested. ERISA also requires that you start vesting within a certain time, which varies depending on the plan schedule. For example, you may be 20 percent vested after two years of service, then your vesting increases gradually over a six-year period until you are fully vested. If you quit the job when you are 60 percent vested, you will be entitled to all of the benefits from your own contributions and 60 percent of the benefits from your employer’s contributions.

What To Do if Your ERISA Benefits Claim is Denied

It is illegal for your employer or plan to withhold ERISA benefits to which you are entitled. If you believe you are partially or fully vested in benefits and your employer or retirement plan administrator is not allowing you to access them, first contact your plan administrator. Sometimes, these issues are caused by administrative errors and may be easily resolved through simple communication. However, if you have communicated with the plan administrator and still are being denied access to your benefits, it is time to reach out to the team of knowledgeable attorneys at McKennon Law Group PC at 800-682-4137. The experienced lawyers at McKennon Law Group PC will fight for you and recover your ERISA pension benefits.

Is There A Time Limit For Filing a Claim Life Insurance?

In most situations, there is no absolute deadline that a claimant must meet to make a claim for life insurance benefits. While policies will usually provide a time frame for submitting a claim, they are obligated to respect any extenuating circumstances that may have prevented a beneficiary from submitting a claim within that time frame. However, this means that you will need to be able to explain why you were unable to submit your claim in the time frame provided by the insurance company.

If you have recently lost a loved one, it is understandable for your mind to be on matters other than a life insurance policy. There are any number of reasons that your insurance claim may be delayed. Do not fear the lapse of time; you should still be entitled to benefits once you submit a claim.

What Factors Determine Whether Your Claim For Benefits Is Late?

A life insurance beneficiary may be unable to submit a timely claim for any number of reasons, including:

•  The beneficiary was unaware of the life insurance policy.
  o You may have been named as a beneficiary by someone without ever knowing they had a life insurance policy. Insurers have little incentive to reach out to inform you that you are entitled to benefits, so many policies go unclaimed because the beneficiaries do not know about them.
• The beneficiary was unaware they had been named in a life insurance policy.
  o If the deceased did not tell you they designated you as a beneficiary, you may be unaware that you need to submit a claim. This can also happen if you were a secondary beneficiary and were unaware that the primary beneficiary was precluded from receiving benefits.
•  The beneficiary did not know which insurance company issued the policy.
  o Even if you know that a life insurance policy is out there somewhere, you may not know which insurance company issued it. If this happens, your best course of action is to conduct your own investigation to determine who issued the policy. You can do this by looking through the insured’s bank statements or correspondence, or by contacting their employer and requesting any information you can use to determine the correct insurance company. You may also be able to locate a life insurance policy using the National Association of Insurance Commissioners’ (NAIC) website. The NAIC Life Policy Locator can assist you in locating life insurance policies and annuity contracts of a deceased family member or close relationship. For information on how to complete the request form, you can review the Frequently Asked Questions on that website.
  When a request is received, the NAIC will: Ask participating companies to search their records to determine whether they have a life insurance policy or annuity contract in the name of the deceased that you entered or ask participating companies that have policy information to respond to you, as the requestor, if you are the designated beneficiary or are authorized to receive information.
• The insurance company told the beneficiary not to file a claim.
  o You may have a valid life insurance claim, but an insurance company representative may have inaccurately told you that the claim would not be paid. You should always question such a response from a life insurance company and speak to a life insurance attorney for an unbiased opinion.

What Happens If I Do Not Claim My Life Insurance Benefits??

Every year, millions of dollars of life insurance benefits go unclaimed. When this happens, the insurance company turns the money over to a state unclaimed property office. Then, you would have to go through the state to recover the benefits, rather than getting them from the insurance company. This is an added complication, so it is best to claim your benefits before it gets to this point, if possible.

While there usually is no set deadline for a valid claim for life insurance benefits, there are deadlines for appealing a denied claim or taking legal action to recover benefits. Each state has its own statute of limitations for appealing denied claims, so your particular deadline will vary depending on where you live. When in doubt, speak to an attorney to understand your deadline.

How Do I File A Life Insurance Claim?

There are four easy steps to submit a claim for life insurance benefits:

1. Collect all relevant documents. You will need at least three things:
1. a death certificate,
2. the life insurance policy,
3. a claim form, or “request for benefits.”
2. Contact the insurance company. You will need to notify them of the death and submit your claim. This can often be done online.
3. Wait for your claim to be processed. Once you have done your end of the work, the insurance company will take time to ensure all the conditions for a payout have been met. Depending on how long the claim processing takes, you may not receive your benefits for up to 60 days.
4. Instruct the insurance company as to how you want to receive the benefits. Many companies will pay out a death benefit as a lump sum, but you may have other options. A popular alternative is receiving your money in periodic installments. Options vary from one insurance company to the next, so you should look into what options are available from the insurance company handling your claim.

How Can A Life Insurance Lawyer Help?

Whether you need to submit a claim for life insurance benefits, determine if your claim is late, better understand life insurance timelines, determine what exclusions or coverage problems exist, a life insurance claims lawyer can help.

McKennon Law Group PC offers free consultations and can give you the legal guidance or assistance you need when it comes to submitting a timely claim for life insurance claim benefits. Call now to get a free consultation for the answers you need from a life insurance law firm with decades of life insurance experience you can trust.

What Are the Reasons a Life Insurance Claim Is Denied?

If your life insurance claim has been denied, there are a number of reasons an insurance company may deny a claim, among them:

• The type of death not being covered by the policy (most often because the death was self-inflicted)
• Exclusions in the policy apply to exclude coverage
• Relevant information was not given at the beginning of the insurance process and the policy is rescinded
• The policy premiums had not been timely paid

What Are a Life Insurance Company’s Responsibilities?

It is important to know what duties life insurance companies owe you, the insurance customer, so that you can properly assess whether your insurer has properly lapsed your policy. A list of common responsibilities are:

• If your policy is due to lapse soon, the insurance company is obligated to send you several notices warning of the possibility your policy will lapse.
• Insurance companies must send clear and obvious pending lapse notices to your correct address. 
• Insurance companies must follow all state laws that pertain to grace periods or notification specifications. 
• In some circumstances, customers who are 65 or older are owed special notification if their policy is in danger of lapsing. 
• Insurance companies must properly allocate the premiums paid to them.
• Insurance companies must notify of your right to designate a third-party to receive insurance notices.

Depending on the circumstances of a particular case, an insurance company’s failure to follow one or more of the above obligations may preclude them from lapsing your life insurance policy and denying your claim. 

What Steps Should You Take to Respond to a Life Insurance Denial Involving a Policy Lapse?

If your life insurance claim has been denied because your life policy has lapsed, there are steps you should take to respond to the denial. These steps are:

1. Carefully review the insurer’s denial letter.  Typically, life insurance claim denials must be in writing and explain the policy terms the insurer is relying on to deny the claim and the reasons for the denial.  Therefore, it is critical to carefully review the life insurance claim denial letter.  You may be able to correct mistakes that may exist in the letter by providing new information to the insurer that can result in a reversal of the denial decision.  
2. Contact your insurance company. By doing this, you can learn why you were denied and clear up any mistakes on either your or the company’s part. You also may be able to discuss what information the insurer needs to properly pay the claim. This is also your opportunity to find out what kind of documentation (such as a death certificate or proof of premiums being paid) you should have available as evidence for an appeal.
3. Contact a life insurance claims lawyer. You should strongly consider hiring an experienced life insurance claims attorney to assist you to give yourself the best chance at success.  If the reason for the claim denial is that your policy was lapsed, you will need to know why it was lapsed and why the insurer may have improperly lapsed your policy.  Laws and regulations are very complex when it comes to life insurance, and especially life insurance lapses, and an experienced life insurance claim lawyer can help you successfully navigate your rights and can adequately respond to the insurer.. Your lawyer should help you identify and organize the evidence you need and act as a go-between with the insurance company and yourself.   
4. Gather all relevant documentation/evidence. By this point, you should know exactly why the initial claim was denied and so should have a sense of what evidence you may need. For example, evidence of payments made, premium and lapse notices, grace period notices, and other relevant letters between you and your insurer. Your lawyer will help determine what you should look for on this step.
5. Decide if you want to or are required to appeal the decision. Once all your evidence and argumentation is in place, you will need to submit your official appeal. This step can be done on your behalf by your lawyer as well. 
6. Keep in communication. Once your appeal has been submitted, you or your lawyer should keep checking in with the insurance company and getting updates on the status of your case. 
7. If your appeal is denied, consider whether you should file litigation against your insurer. 

If you have any questions about life insurance, do not hesitate to schedule your free consultation with McKennon Law Group PC to determine your rights.