What Do I Need To Know Before Receiving A Life Insurance Payout As A Beneficiary?

How Long Does It Take To Process A Life Insurance Claim In California?

Are you a beneficiary expecting a life insurance payout? If so, read on to learn what you can expect as a beneficiary, what you need to know about processing a life insurance claim, and what to do if the insurance company is taking longer than they should to provide you with your life insurance money.

In order to receive a life insurance payout, the beneficiary of the policy must file a life insurance claim as soon as possible after the death of the policyholder. Typically the payout will be received 30 to 60 days after the claim is entered, and beneficiaries can choose to receive a lump sum or have the funds deposited into a special account. If the total amount is not paid within a reasonable time, beneficiaries reserve the right to collect interest on the payout.

If you have questions about being a beneficiary to a life insurance policy, or have questions about the process of paying out a claim, contact McKennon Law Group PC today to schedule a free, no-obligation consultation. We’ll address any questions you have and ensure you understand the process that’s in front of you.

What Happens If A Beneficiary Is Not Designated While Enrolling In A Life Insurance Policy

It is not mandatory to designate beneficiaries when enrolling in a life insurance policy, but it would be wise to do so. Since a life insurance policy is a legally binding contract, insurance companies can only pay those listed as beneficiaries once the policyholder passes away. If a beneficiary has not been listed, the life insurance policy will go through the estate in probate, or will be distributed to next of kin. Sometimes mistakes or changes to beneficiary information on the policy can lead to payout delays. If your payout is delayed, consult with a life insurance attorney to help with the process.

Why Do Insurance Companies Sometimes Delay Or Deny Claims?

Insurance companies will also delay or deny claims for life insurance payouts with specific clauses listed in the policy. For example, if a policyholder dies within the first two years of the policy, the insurance company must contest the policy and investigate for material misrepresentation. Some life insurance policies contain a suicide clause, refusing to pay if the policyholder ends their own life. If the cause of death is homicide or accidental death, some life insurance companies will require a further investigation or a statement from law enforcement to make sure the beneficiary is not a suspect in the crime. The beneficiary must be acquitted of the crime in order to receive the payout.

What Should I Do If My Insurance Company Is Delaying In Paying Out My Claim?

All insurance companies are required to work on a good faith basis. Good faith is “a term that generally describes honest dealing. Depending on the exact setting, good faith may require an honest belief or purpose, faithful performance of duties, observance of fair dealing standards, or an absence of fraudulent intent.”

If you believe that your insurance company is not acting in good faith, you have the right to contact a lawyer and seek justice. Our lawyers know that insurance companies have a bottom line, and that they always look to make as much money as they can, and save as much money as they can. For this reason, they sometimes delay in paying out a claim, or deny it entirely. In these cases, our lawyers will communicate back and forth with your insurance company in order to investigate the situation and see whether or not the insurance company is operating in bad faith.

If not, we can still look into the situation in order to try and understand what is happening. With extensive knowledge of state and local law, our legal team are the representatives you need to ensure justice is being upheld and that you have access to the money you rightfully deserve as a beneficiary.

Schedule A Free, No-Obligation Consultation With McKennon Law Group PC If You Have Questions About Receiving A Life Insurance Payout As A Beneficiary

Not all California lawyers offer a free consultation for those in need of assistance with life insurance payouts. However, our lawyers at McKennon Law Group PC do. In your initial consultation, we take the time to understand your questions about life insurance, receiving your beneficiary money, and what you can expect as a beneficiary. And, if you feel that your life insurance company is acting in bad faith or is purposely delaying in paying out a claim, we will take action and fight back on your behalf.

Eighth Circuit Finds Insurer Breached Its Fiduciary Duty to Claimant by Denying Coverage Where the Insurer Collected Premiums From the Claimant Without Sufficiently Determining Whether the Claimant Was Required To Provide Evidence of Insurability

A recent trend of lawsuits has involved Insurers who seek to avoid paying out life insurance or disability insurance benefits even though they have collected premiums on the policy, because they and the plan participant’s employers never obtained Evidence of Insurability (“EOI”). These insurers deny claims for life insurance and disability insurance benefits on the ground that a claimant was never covered by the policy. The Eighth Circuit Court of Appeals, in Corey Skelton v. Reliance Standard Life Ins. Co., 33 F.4th 968 (8th Cir. 2022), recently provided some clarity as to when an insurer and employer have a fiduciary duty to the insured with respect to life insurance and disability insurance coverage and when those fiduciary duties are breached. In Skelton, Plaintiff worked for Davidson Hotels LLC (“Davidson”) and obtained supplemental life insurance coverage for his wife. The life insurance policy was issued by Reliance Standard (“Reliance”). The policy generally required EOI, including proof of good health, for a member to obtain coverage. However, if an applicant for supplemental life insurance was changing coverage amounts within 31 days of “a life event change (such as marriage, birth, or specific changes in employment status),” then the applicant was not required to submit an EOI and receive Reliance’s approval.

Mrs. Skelton had life insurance coverage for $100,000 and wanted to increase the coverage to $238,000. Her husband regained custody of his son, Mrs. Skelton’s step-son, and she asked Davidson whether this qualified as a life event that would allow her to elect supplemental life insurance. Davidson told her that this did qualify as a life event. Skelton applied for the supplemental coverage and in Davidson’s response she received a notice informing her that she was required to submit EOI. Mrs. Skelton subsequently received a “Benefit Verification / Deduction Authorization” document indicating that she had “Supplemental Term Life” insurance, with the reason for completing the form being listed as “Regaining custody of dependent child.” She then paid premiums for a few months, but stopped, and one year later she qualified for a waiver of her premiums retroactive to when her coverage began. She then passed away and her husband made a claim for death benefits under her policy, which Reliance denied for lack of coverage, stating that Mrs. Skelton was never covered because she did not provide EOI.

Reliance argued that because Davidson’s practice was to collect the premiums and then forward the premiums to it, Reliance did not have a fiduciary duty to Mrs. Skelton. However, the district court held that Reliance had a fiduciary duty to ensure that its system of administration did not allow it to collect premiums until coverage was actually effective. The court held that

“Fiduciary status . . . is not an all or nothing concept. A court must ask whether an entity is a fiduciary with respect to the particular activity in question.” Maniace v. Com. Bank of Kansas City, 40 F.3d 264, 267 (8th Cir. 1994), quoting Kerns v. Benefit Tr. Life Ins. Co., 992 F.2d 214, 217 (8th Cir. 1993). “[A]n insurer who is not the plan administrator has no ERISA fiduciary duty” for a particular activity “unless the policy documents or the insurer’s past practices have created [such] an obligation.” Id.

The court held that the “ability to determine Mrs. Skelton’s eligibility for supplemental life insurance made Reliance a fiduciary for Skelton’s application process.” Reliance argued that while it had fiduciary duties related to eligibility and making claims decisions, those duties did not extend to enrollment. But because the policy language provided that enrollment occurred automatically as a result of Reliance’s eligibility decision, Reliance was therefore Mrs. Skelton’s fiduciary, as it essentially determined enrollment. The “plan documents and the insurer’s acts determine whether it is a fiduciary for the relevant function.” See Kerns, 992 F.2d at 217. Thus, as the entity that determined eligibility and conducted enrollment, Reliance was Skelton’s fiduciary.

The court further held that Reliance breached its fiduciary duty by failing to maintain an effective enrollment system. The court held that a reasonably prudent insurer would use a system that avoids the employer and the insurer having different lists of eligible, enrolled participants, and that Reliance used an insufficient, haphazard system. Reliance sent Davidson monthly status reports listing pending applications, but the reports did not include employees who had not submitted EOI, which resulted in a “ships passing in the night” situation between Reliance and Davidson as to who was eligible for coverage.

With respect to Reliance Standard’s argument that it did not communicate with the employer about enrollment in the ERISA plan, the court rejected it, explaining:

Reliance cannot insulate itself by failing to communicate with Davidson about enrollment—which Reliance controlled—while having Davidson remit ill-gotten premiums. ERISA seeks “to protect … the interests of participants in employee benefit plans and their beneficiaries” and to “increase the likelihood that [they] receive their full benefits.” 29 U.S.C. §§ 1001(b), 1001b(c)(3). This Circuit has emphasized that allowing plaintiffs to seek full recovery for breach of fiduciary duty “is so important” because this eliminates the “‘perverse incentive[ ]’” for fiduciaries to “‘enjoy essentially risk-free windfall profits from employees who paid premiums on non-existent benefits but who never filed a claim for those benefits.’” Silva, 762 F.3d at 725, (quoting McCravy v. Metro. Life Ins. Co., 690 F.3d 176, 183 (4th Cir. 2012)). Allowing an insurer to use “a compartmentalized system to escape responsibility” would undermine ERISA’s purposes. See Salyers v. Metro. Life Ins. Co., 871 F.3d 934, 940 (9th Cir. 2017) (quotations omitted).

Indeed, allowing a fiduciary to escape liability because it designed an enrollment system that ensured it would not know it was collecting “premiums on non-existent benefits” would endorse willful blindness—and the exact “perverse incentive” this Circuit has decried. See generally Patterson v. Reliance Standard Life Ins. Co., 986 F. Supp. 2d 1140, 1150 (C.D. Cal. 2013) (“Reliance Standard did not conduct any such investigation and only investigated the eligibility of Ms. Dietrich for *979 supplemental life insurance coverage after her death.”); Cho v. First Reliance Standard Life Ins. Co., 852 Fed. Appx. 304, 305 (9th Cir. 2021) (holding Reliance liable where employer erroneously collected premiums from ineligible person for over a year despite unsubmitted EOI); cf. Chao v. Merino, 452 F.3d 174, 182 (2d Cir. 2006) (stating, in ERISA breach-of-fiduciary-duty case, that under the duty of prudence, “If a fiduciary was aware of a risk to the fund, he may be held liable for failing to investigate fully the means of protecting the fund from that risk”).

Indeed, allowing a fiduciary to escape liability because it designed an enrollment system that ensured it would not know it was collecting “premiums on non-existent benefits” would endorse willful blindness—and the exact “perverse incentive” this Circuit has decried. See generally Patterson v. Reliance Standard Life Ins. Co., 986 F. Supp. 2d 1140, 1150 (C.D. Cal. 2013) (“Reliance Standard did not conduct any such investigation and only investigated the eligibility of Ms. Dietrich for *979 supplemental life insurance coverage after her death.”); Cho v. First Reliance Standard Life Ins. Co., 852 Fed. Appx. 304, 305 (9th Cir. 2021) (holding Reliance liable where employer erroneously collected premiums from ineligible person for over a year despite unsubmitted EOI); cf. Chao v. Merino, 452 F.3d 174, 182 (2d Cir. 2006) (stating, in ERISA breach-of-fiduciary-duty case, that under the duty of prudence, “If a fiduciary was aware of a risk to the fund, he may be held liable for failing to investigate fully the means of protecting the fund from that risk”).

Skelton, 33 F.4th at 978–79. The court additionally held that Reliance breached its fiduciary duty by accepting Skelton’s premiums without providing coverage. “ERISA fiduciaries must comply with the common law duty of loyalty, which includes the obligation to deal fairly and honestly with all plan members.” Shea v. Esensten, 107 F.3d 625, 628 (8th Cir. 1997). This includes the duty to not profit at the beneficiary’s expense.

Reliance argued that because it received all of the premiums from Davidson, it had no way of knowing whether Mrs. Skelton’s payments were made, but it presented no evidence that it did not receive payment for Mrs. Skelton’s life insurance policy from Davidson. The court thus held that Reliance breached its fiduciary duty to Mrs. Skelton by receiving her premiums without giving her a corresponding benefit of coverage, while serving as a fiduciary for her eligibility and enrollment, and thus profited at her expense by avoiding any financial risk of having to pay benefits for her.

Notably, the court did not hold that Reliance became a fiduciary merely by receiving premiums from an ineligible employee. The court found that Reliance told Mrs. Skelton that she would not pay premiums until it approved her application, then it took her premiums without approving her application, thus profiting on its broken promise. This act of misleading Mrs. Skelton (by causing her to believe that if she was paying premiums, she was covered for the supplemental coverage), then profiting off of her premiums without approving her application, was Reliance’s breach of its fiduciary duty.

The Skelton court’s decision demonstrates that an insurer can be held liable for a breach of fiduciary duty even where it does not have actual knowledge that a participant is paying premiums. Because a reasonably prudent insurer would have facilitated a system that reliably informed Davidson as to which participants’ premiums were being paid and which participants were required to provide EOI, Reliance breached its duty. The Skelton court’s holding provides a blueprint of recourse for participants whose insurers have breached such fiduciary duties.

If you or someone you know has experienced the same or similar treatment from an insurer or employer, you may be able to hold them accountable. McKennon Law Group PC is highly experienced in handling denied ERISA claims, including those involving the insurer’s breach of fiduciary duty. Contact McKennon Law Group today for a free consultation.

How Long Does It Take To Process A Life Insurance Claim In California?

Life insurance exists to protect your loved ones after you pass away. If anyone in your family relies on you for financial help and protection, you will need a way to provide for them after you pass away, or in the event that you pass away suddenly. For example, parents of young children should file life insurance policies to ensure that their children can receive funds if they were to pass away, especially in a sudden or unexpected way,

Life insurance benefits should be paid after the insured has passed away and, of course, after the proposed beneficiary has properly filed a claim with the life insurance company. The beneficiary will then need to submit a copy of the death certificate to their insurance company, as well as any other supporting documentation that provides insight into the deceased’s passing.

Generally speaking, the faster you submit the correct paperwork, the laws that govern your claim and the insurance company’s processing time are all factors that will tie into how long it takes to process your life insurance claim and receive your check. In most cases life insurance companies are required to pay out claims within thirty to sixty days after they receive the documentation from you. So, the faster you provide them with information, the faster they should be able to provide you with your payout.

All life insurance companies are required to operate in good faith, meaning they owe you a duty of care and are legally required to not delay in paying out claims for no reason at all. Contact a California life insurance lawyer if you need help navigating your life insurance policy, or you feel that your claim is taking too long to process and pay out.

Why Is It Taking So Long To Receive My Life Insurance Money?

First, as mentioned earlier, the faster you submit important documentation, the faster you will likely receive your claim. But if you promptly submitted your information and it’s still taking awhile, there are other factors that could be to blame.

Some life insurance policies have a two-year contestability clause laid out in the contract. If the death in question happened within the first two years of the policy being filed, the life insurance company withholds the right to fully investigate the claim, in order to ensure that no mistakes or misrepresentations were made on the application for life insurance. The life insurance company also has the right to review the original application and the insured’s medical records to determine whether the insured provided false or incomplete information. If the insured person did not provide material information on the application, the company might delay or deny paying the claim based on material misrepresentation. Investigating such claims may take up to a year or even longer.

However, it’s important to remember that if you have held the life insurance policy for longer than two years, it’s quite likely that the life insurance company will opt to not investigate your claim, unless there are questionable or suspicious circumstances regarding the person’s death.

Sometimes, life insurance companies simply have a backlog. If they are short staffed or under staffed, or have a busier schedule than normal, this could impact how long it takes to process your claim. There are a multitude of reasons why processing your life insurance claim could be delayed. This is one of the many reasons it is crucial to work with a lawyer who understands your side of the story, and has extensive experience working with people in situations just like yours. It can seem hard, even impossible to stand up to insurance companies, but with the help of a California life insurance lawyer, it is possible.

Schedule A Free Consultation With A California Life Insurance Lawyer Today

All life insurance companies are required to operate in good faith. This means, they owe you a duty of care and are required by state and federal law to process claims and pay them out as promptly as possible. But, unfortunately, we know by now this isn’t always the case. At McKennon Law Group PC, we offer a free consultation for any life insurance beneficiary who is experiencing a delayed claim or is unsure when their life insurance money will be processed and paid out.

Schedule a free, no obligation consultation with a California life insurance lawyer as soon as possible. Our team of attorneys will help you fight back against big insurance companies, stand up for yourself and your loved ones, and get the money you deserve from your claim. Our team is here to help.

What Should I Do If My Life Insurance Claim Was Denied?

Life insurance policies are a smart way of financially protecting your loved ones in the future. If anyone in your family relies on your income and financial support, and will experience hardship if this financial support no longer exists, life insurance will pay out a sum of money to these dependents once you’ve passed away. The insurer should pay out the full amount in the policy after the insured dies. But, sadly, this isn’t always the case.

Big life insurance companies have a bottom line, and are always trying to save money. Sometimes, these big life insurance companies will deny reasonable claims for simply no reason at all. When this happens, beneficiaries of the deceased may experience serious financial hardship without the life insurance money that was intended to protect them.

Read on to learn what you can do if your life insurance claim was denied by the insurance company. We’ll break down what you can do and, if you have any questions about life insurance policies or about filing an appeal for a denied claim, contact us for a free consultation regarding your situation.

How Do I Know My Life Insurance Claim Was Denied?

You will be contacted by the life insurance company in order to tell you that your life insurance claim has been denied. The insurance company sends the proposed beneficiary a formal letter by mail, which will break down the reasons why the life insurance claim was denied. In the letter, the insurance company will typically take this time to quote specific standards and provisions from the policy that apply to your specific case, listing documents that they reviewed and evidence they leveraged in order to make the decision to deny your claim.

In some random cases, a beneficiary’s claim may be denied via a phone call. If you have had your life insurance claim denied in a phone call, you have every right to contact your life insurance company and request a formal denial letter in writing. It will be helpful to have this document on hand. A denial letter not only outlines important information that is required to fight back against the denied claim, but it also demonstrates exactly what day the life insurance company decided to deny your claim, and helps you outline a timeline for appealing the claim or deciding to file a lawsuit.

The denial letter that a beneficiary receives from the insurance company will be a crucial part of the appeal procedure, so be sure to have a physical copy for your records. With this information, a skilled California life insurance lawyer can outline a procedure for filing an appeal.

Why Did My Life Insurance Claim Get Denied In California?

There are a multitude of reasons why a life insurance claim can get denied in California. The following is a list of just a few examples, as there are many more reasons:

Policy was canceled or the life insurance lapsed because of a missed payment
Failure to reinstate the policy after a lapse or missed payment
Failure to provide correct or accurate information on life insurance application
The deceased passed away due to alcohol or drug use, including prescription drug misuse
The deceased passed away due to a sickness or treatment that is excluded from the policy
Failure to disclose a pre-existing medical condition
Failure to disclose frequency of medical check ups
Misrepresentation of the deceased’s weight, age or income
Denial under the two-year life insurance contestability clause
The deceased passed away via suicide
The deceased passed away in a foreign country
And much more

When filing for any kind of insurance, always be sure that you consult with a lawyer in order to know what you’re signing up for, and what is required of you to ensure you receive the full scope of benefits that you are requesting.

How Does A Lawyer Help Me File An Appeal For A Denied Life Insurance Claim?

First, your lawyer will help you contact the insurance company to find out why exactly the claim was denied. Sometimes, denial letters are hard to decipher, so we will help you figure out exactly what you need to do to proceed. Your insurance company will let you know if your policy allows you to file an appeal, and will let you know which documentation you need to do so. This may include medical records, reports of an autopsy, or receipts of your insurance payment. Your lawyer can help you collect all of this.

Our attorneys handle denied life insurance claims all the time. We will take the time to listen to your fears and concerns and, in a free consultation, will provide you with all of the resources you need to get help. To successfully file an administrative appeal for a denied life insurance claim, your California life insurance attorney will create and present a strong convincing argument that is based upon the facts of the case, which will be supported by the state and federal laws that govern it.

What Happens If My Life Insurance Claim Was Denied?

Was your loved one’s life insurance claim wrongfully denied, or has your insurance company delayed too long in processing the claim and getting you your money? When we buy life insurance, we do so to protect the people we love and to prepare for the day when we finally pass away. Life insurance is designed to provide funds to those who need them but, unfortunately, life insurance companies often fail to pay out claims in a timely manner or deny the claim altogether. When this happens, people miss out on the money they need to move forward after losing a loved one, and the money they need to recuperate from the financial loss associated with the death.

Of course, life insurance companies are required to pay the benefits that are laid out in the policy, and to adhere to any terms and conditions that are laid out in the contract that they and the policyholder both signed. But sadly, it’s not always the case, and life insurance companies are notorious for making things difficult for those who hold policies. If you find that your life insurance company has wrongfully denied the payment of a death benefit claim on behalf of your deceased loved one, this can be considered bad faith insurance dealing. Schedule a free consultation with our attorneys for help.

What Is Life Insurance?

Life insurance is defined as “a contract between the insurance company and an insured in which the company promises that at the death of the insured, the company will pay a certain amount of money to a person the insured designates in the contract if that person survives the insured. In return for the promise to pay, the insured will pay the life insurance company a premium.”

Legally speaking, life insurance is considered a third party beneficiary contract because it is made for the benefit of a person who is not a party to the agreement. This type of insurance is denied to provide funds to those who need them after a loved one has passed away. If you find that your life insurance company is operating in bad faith, on top of grieving the loss of a loved one, you shouldn’t have to deal with this added stress. Our lawyers will handle every aspect of solving this situation so you can get back on your feet faster and spend more time with your loved ones.

What Is Bad Faith Insurance?

Insurance companies are required to act in good faith. Bad faith insurance dealing is when an insurer fails to fulfill its obligations to its policyholders. This can mean either failing to pay a policyholder’s valid and legitimate claim, or if they are delayed in processing a legitimate claim within a reasonable time frame.

Additionally, if an insurance company does not disclose exclusions, limitations or exceptions on a policyholder’s coverage before they purchase the coverage or amend it, this is bad faith as well. Insurance companies are required to operate with transparency and integrity at all times, but sadly this isn’t always the case.
Insurance companies are required to uphold what is laid out in their contracts with policyholders. If this contract is ever breached or these duties are not upheld, the insurance company may be found to be operating in bad faith. If you believe your insurance company is acting in bad faith, a lawyer can help.

How Does A Lawyer Help Me If My Life Insurance Claim Was Denied?

Was your loved one’s life insurance claim wrongfully denied? You have the right to push back against a bad faith insurer, but may have difficulty doing so without the help of an attorney. It can be hard to stand up to these companies alone.
Our team of attorneys at McKennon Law Group have extensive experience fighting back against bad faith insurance companies and doing the work necessary to defend you from their wrongdoings. You have the right to have your loved ones life insurance policy paid out in an appropriate time frame, and also uphold the right to anything that is laid out in the contract between both you and your insurance company.

If you or a loved one have been denied a claim and feel that this was the wrong decision, our attorneys can help you file an appeal and push back to get what you need. It can be hard standing up to big insurance companies by yourself, so be sure to contact a lawyer right away to get started on the process. We’ll stop at nothing to secure the best outcomes for you and your team.

Why Was My Life Insurance Policy Denied?

Life insurance exists to help those who’ve lost a loved one. Family members of the deceased are protected by their life insurance plans after they pass away, as they provide financial relief and compensation when the surviving loved ones need it most. But even life insurance policies that are thoroughly drafted, with contracts signed, can take awhile to pay out.

Insurance companies seem to always find a way to delay paying out claims, or deny claims altogether. The reasons below are some of the most commonly occurring reasons we see at McKennon Law Group. If you or a loved one are being denied a life insurance policy claim, or your claim is being delayed, contact our attorneys for a free case evaluation.

Reason 1: Drugs or alcohol were involved in the death

Unfortunately, many life insurance companies will disqualify deaths that occurred under certain circumstances. Death due to drug or alcohol abuse are often included as some of these circumstances. This manner of death is referred to as “self-inflicted,” and typically refers to any death that occurs when the deceased happened to be under the influence of these substances– even if their cause of death wasn’t directly due to the consumption.

If your life insurance policy claim is being delayed or denied due to a drug- or alcohol-related death, contact McKennon Law Group for help.

Reason 2: The deceased died via homicide

There are some exceptions, but many life insurance policies don’t cover homicide. These cases are especially complex. If a beneficiary is suspected of homicide, and it’s believed that they intentionally killed the deceased, they won’t have a chance at receiving the benefits until the investigation ends. Similarly, if a beneficiary engaged in any other criminal or unlawful activity, especially one that’s believed to have contributed to the death of the deceased, the claim will be held up until the investigation is resolved or the beneficiary is no longer under investigation.

Reason 3: Death by suicide

Life insurers have the right to delay or deny a claim if the death occurred by suicide. There are clauses in most insurance policy contracts that aim to discourage those contemplating death from buying a life insurance policy. Sometimes, insurance companies will flag this as a type of life insurance policy fraud. It’s important to note, however, that not all life insurance policies exclude suicide as a rule, so be sure to check the fine details.

In situations like these, it’s wise to seek the help of an attorney who can contact the deceased’s insurance company, find out valuable and detailed information from the contact, and fight for your right to life insurance policy money.

Reason 4: The deceased passed away during the contestability period

If an individual passes away within the first two years of their insurance policy being active, the insurer can contest the policy if they so choose. When someone applies for life insurance, the application will require certain information. This information might include their income, health, criminal history, age, body mass index, and more. Insurer’s have the right to contest the applicant’s information in order to make sure it’s accurate.

During this window, which is referred to as “the contestability period,” the insurance company may discover that the information was not entirely accurate, or there might be important information that was excluded from the original life insurance policy application. The insurer has the right to deny coverage if this occurs. For example, if an individual fails to disclose that they’ve been arrested before, or doesn’t disclose that they smoke cigarettes, the insurer can back out of coverage.

Similarly, an insurance company can deny paying out a life insurance claim if it’s been discovered that information in the application or life insurance policy was inaccurate, misrepresented or untruthful. Even if the death in question did not occur as a direct result of the misrepresentation, for example, if someone failed to say they smoke cigarettes, but died due to a car accident.

Reason 5: The insured failed to pay their insurance policy premium

This is one of the most commonly occurring reasons that an insurance company might delay in giving a claim or deny it altogether. Life insurance policies are only active for as long as the insured completes payments on time. When the insured fails to pay their premium, the insurance can lapse or be canceled altogether.

This type of denial and delay are quite common. If you or a loved one has an insurance policy, always be certain that payments are being made on time and the full amount of the premium requested is paid by any associated deadline. It’s important to note as well that beneficiaries have the right to know whether or not insurance companies sent late payment notices to the policyholder, and whether or not the situation was rectified.

How Long Does It Take To Process A Life Insurance Claim In California?

What Happens If A Beneficiary Is Not Designated While Enrolling In A Life Insurance Policy

Why Do Insurance Companies Sometimes Delay Or Deny Claims?

What Should I Do If My Insurance Company Is Delaying In Paying Out My Claim?

Schedule A Free, No-Obligation Consultation With McKennon Law Group PC If You Have Questions About Receiving A Life Insurance Payout As A Beneficiary

Why Is It Taking So Long To Receive My Life Insurance Money?

Schedule A Free Consultation With A California Life Insurance Lawyer Today

How Do I Know My Life Insurance Claim Was Denied?

Why Did My Life Insurance Claim Get Denied In California?

How Does A Lawyer Help Me File An Appeal For A Denied Life Insurance Claim?

What Is Life Insurance?

What Is Bad Faith Insurance?

How Does A Lawyer Help Me If My Life Insurance Claim Was Denied?

Reason 1: Drugs or alcohol were involved in the death

Reason 2: The deceased died via homicide

Reason 3: Death by suicide

Reason 4: The deceased passed away during the contestability period

Reason 5: The insured failed to pay their insurance policy premium

Get the Answers and Assistance You Need