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.

A beneficiary who faithfully pays life insurance premiums for years has a right to expect a full payout. 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 to order the payment of your claim.

What Happens When A Life Insurance Claim is Denied?

If you are a beneficiary, the life insurance company may notify you of a denial by letter or phone. A letter from the insurance company may explain 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, 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. A written decision on the denial of your life insurance claim is required by law.

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 was a material misrepresentation of fact on the life insurance application.
3.  The policy was provided through an employer, and coverage was terminated when the employment ended or   the employer switched to a different insurance provider.
4.  The policy was for accidental death only, and the death was not accidental.
5.  An exclusion in the policy excludes coverage.

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, or none at all, 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, the autopsy report, or receipts for premium payments.

How Will an Insurance Claims Lawyer Handle Your Case?

The next step is contacting a highly qualified life insurance attorney who will review the policy, the stated reasons for denial, and any other pertinent documents.

The attorney will discuss with you how the law applies to your case and will explain your options, which may include appealing the denial decision and/or suing the insurance company. However, many life insurance policies and Employee Retirement Income Security Act of 1974 (ERISA)-governed life insurance policies require at least one administrative appeal before an insured or his/her 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 paying as little as possible on claims. 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 wrongly delays or denies benefits, the right life insurance lawyer can help.

A life 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, evidence and applicable laws. 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?

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 non-government employer, select 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 and favorable state law will apply. California is especially favorable to life insurance claimants.

The ERISA statutes provide 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, pre-judgment interest and attorney’s fees, and will not include bad faith or punitive damages. Your case will be heard by a federal judge as opposed to a jury.

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 allegations arise from an insurance company’s specific acts or failures to act. Insurance bad faith includes but is not limited to:

1.  Delaying an investigation for no apparent reason and delaying payment of the life insurance claim.
2.  Denying a life insurance claim for clearly false or fabricated reasons.
3.  Denying a life insurance claim based on an inadequate investigation.
4.  Tricking or intimidating a claimant to take a settlement offer for less than the life insurance claim is worth.

Bringing the Matter to Its Best Possible Conclusion

Your life insurance lawyer may ask the insurance company to produce all documents it has that are pertinent to your claim, and may depose or subpoena a representative of the company.

Your life insurance claims lawyer may also ask an insurance industry expert to make a statement or testify on your behalf regarding standard life insurance procedures and practices. The right attorney will do what it takes to bring the matter to its best possible conclusion.

If your legitimate 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 a claim, discuss your claim – at once – with a California life insurance claims lawyer who will help you seek justice.

If you believe you are the victim of an insurer’s bad faith practices, contact McKennon Law Group PC for a free consultation.