Tactics used by insurance companies to delay or deny legitimate life insurance claims


Life insurance policies help bereaved beneficiaries move on with their lives without financial hardship after the death of a dependent or breadwinner. Insurance companies should facilitate a smooth transition by paying the deceased’s contributions to their beneficiaries.

The last thing you want to face in a bereavement is an unreasonable excuse from an insurance company to delay, deny or avoid paying benefits. Fortunately, you can contact lawyers in Anchorage Alaska to get the justice you deserve.

Common delay or denial tactics used by insurance companies

Most insurance companies cite convoluted policy provisions filled with legalese and written in ambiguous language. But did you know that these provisions are designed to make you think you have no legal recourse when you do?

Insurance companies resort to misinterpreting applicable law or policy language when pressing the claim and legal advice or representation is important when pursuing a life insurance claim . Common delay or denial tactics used against life insurance beneficiaries include:

1. Alleged inaccuracies in the policy document

Insurance policies usually have a disputable period – covering a period of 2 years from the effective date of the policy. The insurance company can challenge the validity of a policy if the insured dies within these 2 years by suicide, or if he has made a false statement about his health or condition.

The contestable period is a window where insurance companies establish the authenticity of the information provided by the insured. Any misrepresentation detected during this period will invalidate or render the policy null and void, meaning that beneficiaries will lose all accrued benefits.

The insurer can no longer contest after the expiry of the contestable period and the policy is then considered “contestable”. Minor, unintentional and inconsequential errors that result in misrepresentation are not sufficient grounds to invalidate the life insurance policy for a questionable period. In addition, unintentional inaccuracies can be invoked to avoid a claim even after the expiry of the dispute period.

2. The cause of death is not covered by the provisions of the policy

Insurance policies generally include exclusion or waiver clauses for certain deaths, including:

  • Death by suicide;
  • Deaths linked to poisoning;
  • homicides;
  • Death resulting from illegal activities;
  • Deaths caused by acts of war or riots;
  • A death resulting from hazardous activities and sports.

Exclusion clauses can be ambiguous and provisions can sometimes even conflict with each other, but life insurance companies always cite them to avoid legitimate claims.

3. Default premium quote

Non-payment of premiums potentially invalidates the life insurance policy and insurance companies often quote this even because they know you have no way of knowing the truth, especially if you are not not legally represented.

Beneficiaries must be presented with the premium payment slip, including proof of premium notices sent to the correct address of the insured. In addition, premium notices must state that failure to[paypremiumswilllapsethepolicy[paypremiumswilllapsethepolicy[payerlesprimesentraîneraladéchéancedelapolice[paypremiumswilllapsethepolicy

4. Citing failure to submit a claim for coverage

Group life insurance policies are common among employees and the employer is responsible for educating employees on the benefits of the policy, submitting relevant employee information to insurance companies, issuing relevant documents to covered employees and to pay the premiums.

Some employers misrepresent employee information or fail to submit premiums or required documents/information from the covered employee, invalidating the life insurance policy. The employees, in this case, lose the money intended to pay the premiums to the employee while the beneficiaries lose their legitimate contributions through the negligence of rogue employers.

Employees who always thought they were covered are caught off guard when they visit their insurer. The employee can take legal action against the employer if they have fulfilled their protection obligations, even when the employer omits certain crucial facts about the policy.

A premium waiver suspends premium payments if a policyholder is disabled due to injury or becomes seriously ill. Employers must inform the covered employee how to obtain a waiver of premiums on their life insurance policy. Unfortunately, some employers continue to collect premiums and fail to submit them to the life insurance company.

Employees may never discover their employer’s faults, and they will only be discovered when beneficiaries file a claim – insurance companies are very quick to quote an expired policy through unpaid premiums in such cases.

How can a lawyer help?

Legal advice can be invaluable when purchasing a life insurance policy. A lawyer will brief you on the entire process of buying the policy and how to approach or hire the insurance company. Besides legal advice, the lawyer can liaise with the insurance company and save you the stress of the buying process.

You may need to engage a legal expert early on or when purchasing the life insurance policy, as your beneficiaries may be denied benefits even when the claim is legitimate. Insurance companies do everything possible to avoid liability and increase their profit margins.


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