When someone dies, life insurance is meant to provide financial security during one of the hardest moments a family will ever face. Instead, many beneficiaries are surprised to receive a denial letter from the insurance company. Fortunately, a denial is often not the final answer. In many cases, it is the starting point of a process where a lawyer can make a meaningful difference.
This blog post explains why life insurance claims might be denied and how a lawyer can help challenge those denials.
Why Life Insurance Claims Are Denied
Insurance companies usually give a reason for denying a claim, but those reasons are not always fair or accurate.
One common reason is an alleged mistake on the insurance application. The company may argue that the person who bought the policy failed to disclose a medical condition, medication, or lifestyle habit such as smoking. Even small or innocent errors made years earlier are sometimes used to justify denying benefits.
Another frequent reason is an alleged lapse in the policy. The insurer may claim that premiums were not paid on time and that the coverage ended before the death occurred. This can happen when automatic payments fail, notices are overlooked, or billing statements are sent to the wrong address.
Many denials also occur during what is called the contestability period. This is usually the first two years after a policy is issued. During this time, insurers may comb through records looking for any justification to avoid paying the claim.
Finally, insurers may rely on exclusions in the policy. These exclusions might relate to certain causes of death, such as suicide within a specific time period or death during certain activities. These exclusions are often misunderstood or applied more broadly than the policy actually allows.
How a Lawyer Helps When a Claim Is Denied
Insurance companies understand that most beneficiaries are grieving and unfamiliar with insurance rules. A lawyer helps restore balance in that situation.
First, a lawyer carefully reviews the policy. Life insurance contracts are long and confusing, and many important details are buried in fine print. A lawyer can determine whether the insurance company is misreading its own policy or relying on unclear language. When policy language is vague, the law often requires that it be interpreted in favor of the beneficiary.
Second, a lawyer investigates the real reason for the denial. This often involves requesting the insurer’s internal records, underwriting files, medical reviews, and payment history. The explanation given in the denial letter may not match what actually appears in the insurer’s own documents.
Third, lawyers frequently challenge claims that the policyholder made a misrepresentation. A lawyer may show that the application question was unclear, that the omitted information would not have affected the insurer’s decision, or that the insurer had access to medical records but issued the policy anyway. Courts may reject denials based on technical or harmless mistakes.
Fourth, if the policy was provided through an employer, federal law usually applies. These cases follow strict rules and deadlines, and missing a step can permanently end the claim. A lawyer ensures that appeals are handled properly and that all supporting evidence is submitted on time. When appeals do not succeed, a lawyer can file a lawsuit and present evidence to a judge. Insurance companies often take claims more seriously once legal action begins, and many cases are resolved before trial.
Finally, speaking with a lawyer early can preserve options that may disappear with time. Waiting too long can mean losing the right to appeal or losing access to important evidence.
Final Thoughts
A denied life insurance claim does not mean the matter is over. It means the insurance company has made a decision that deserves careful scrutiny. For families facing loss and financial uncertainty, a knowledgeable life insurance lawyer can be the difference between a rejection letter and the financial security their loved one intended to provide. If your life insurance claim has been denied, contact Joel Ewusiak for an evaluation of your specific circumstances.