Why insurers deny claims
Most denials fall into a handful of categories. Knowing which one you are dealing with tells you what evidence matters.
- Misstatements on the application. If the insured died during the contestability period, the insurer may say a health question was answered wrong. See contestability and rescission.
- An exclusion. The insurer says the death falls within a policy exclusion, such as suicide during the first policy years, or, for accidental death coverage, intoxication, drugs or an illness. See AD&D claims.
- Lapse. The insurer says coverage ended for an unpaid premium before the death. Whether proper notices were sent can matter a great deal.
- Cause or manner of death. The insurer disputes what the death certificate or medical examiner concluded, or relies on an “undetermined” ruling.
- Coverage questions. Under a group policy, the insurer may say the person was no longer an eligible employee, or that extra coverage was never approved.
What to do in the first few weeks
- Keep every letter and envelope, and write down the date each one arrived.
- Ask the insurer in writing for a complete copy of the policy (or the group plan documents) and the claim file.
- Do not sign new medical authorizations or sit for a recorded interview without advice.
- Do not deposit a premium refund check until you understand what it means.
- Talk to a lawyer before the appeal or response deadline, not after.
How we challenge a denial
We start with the reason the insurer gave and test it. If the denial says the insured hid a condition, we look at what the application actually asked and what the records actually show. If it says an exclusion applies, we look at the exact wording and whether the facts fit it. Our medical and claims team members review the same records the insurer used.
From there, the path depends on the policy. A claim under an employer’s group plan often has to go through a written appeal first, and that appeal becomes the record a judge may later review, so it has to be complete. An individual policy can often be challenged directly, through a demand and, if needed, a lawsuit.
Questions families ask
Should I call the insurer to argue the denial?
Usually not. Anything you say can be noted in the claim file and used to support the decision. Put requests in writing and get advice before responding to the substance of the denial.
Is there a deadline to challenge a denial?
Usually, yes. Group policies from an employer often require an internal appeal within a set period stated in the letter, and lawsuits have their own time limits under the policy and state law. Treat the date on the letter as the start of the clock.
What if the insurer offered to refund the premiums?
A premium refund usually comes with a rescission, which means the insurer is treating the policy as if it never existed. Cashing that check may be argued against you later, so talk to a lawyer before you deposit it.
Do you handle claims where the policyholder is still alive?
Generally, no. We only handle cases where the insured has died or been seriously injured, or where the insured is terminally ill. We do not handle premium increases, reinstating a policy that lapsed for missed payments, or applications for coverage that were turned down.
General information from the attorneys at Life Claim, not legal advice. Policies, plans and state laws differ, and every claim turns on its own facts.
