Many people purchase life insurance in order to protect their families and loved ones after they have died. However, there are cases where insurance companies choose to unreasonably deny life insurance claims on valid policies. They may also make decisions to unreasonably fail to fairly or fully pay claims promptly. When those two circumstances occur, this is referred to as insurance bad faith.
During the first two years of a life insurance policy, there generally exists a period where insurance companies are allowed to contest claims on policies. Insurance companies typically look for inaccuracies and instances of fraud on applications to avoid paying out on claims. For instance, it may be alleged that a situation listed in their exclusions existed, such as a serious health condition. When this happens, insurance companies deny life insurance claims, refusing to pay the life insurance benefits and usually only returning policy premiums that were paid. As disclosed by the Whitehead and Associates law firm, “Life insurance policies are purchased to protect and provide for our families by taking care of the ones left behind. A denied claim is the last thing beneficiaries expect as they are dealing with the death of the insured.”
When insurance companies commit bad faith, the only recourse for policy holders is to pursue insurance bad faith litigation. In situations where life insurance companies elect not to pay claims, many make this decision based upon what they perceive as either an incorrect medical history on the application or deliberate attempt to conceal information that would change the terms of the policy. In either instance, insurance companies move to make all claims in connection with these policies invalid. Should this occur, it is highly advisable to enlist the services of a qualified bad faith insurance lawyer.
Initially, they will need the following information:
- Name of the person who filled out the application
- Whether an insurance company agent was involved
- Whether or not the applicant was given the chance to read the application
- Whether the application was completed by a broker rather than an agent
- If mistakes were caused by an agent and the insured was not given an opportunity to correct it
The above are important questions that will be used to determine how to proceed with a bad faith insurance lawsuit. For instance, if it can be proven that the application was properly completed, insurance companies may be held legally liable to pay all of the policy benefits.
During the process of insurance claim denial, insurance companies make requests of policyholders that can either seem simple or confusing. When dealing with life insurance policy representatives, claimants should be careful to:
- Make all communications in writing
- Document every action that is taken
- Keep notes of conversations, names, times, dates and requests
- Make duplicate copies of all documents
- Maintain copies of everything that is sent to and received from insurance companies
The above is very important to ensure that there is a paper trail of everything that occurs before, during and after the claims process. While it is important to cooperate with reasonable requests made by insurance companies, it is highly advisable that, before any information is submitted, a legal specialist or attorney review the request. This will ensure that information is not provided that could be used against a claimant.
Anyone who becomes a victim of an insurance company’s refusal to pay on a valid life insurance claim should contact an attorney specializing in denied life insurance claims as soon as possible. Most lawyers offer a free, no-risk consultation to evaluate each situation on a case by case basis. Only an experienced bad faith life insurance attorney will understand how to navigate the complex legal system governing insurance bad faith claims.
Nadine Swayne shares this information with families who have lost a loved one and are dealing with the denial of life insurance benefits. At the Whitehead and Associates law firm, attorneys are well-versed in insurance law and will aggressively fight to help beneficiaries recuperate funds that they deserve.
Donna is a Content Creator, Marketer, Brand Ambassador, Social Media Consultant, former teacher, wife, and proud mom. Blog by Donna encompasses all that… she writes about family life and being a woman while weaving in articles about the brands and products she and her family love.
Good to know, because you never know.
Thanks for sharing that information.
Thanks! Many people think you just purchase the insurance and that’s it, you’re done. Glad to share the info!
Great advice! I think life insurance is really important.
You know I this never occurred to me. Thanks for telling us about this and telling us what we need to do about these situations.
Gosh…I can imagine having to deal with this after losing a loved one.
Great stuff here Donna.
My husband is absolutely in life insurance denial. He feels like making a purchase will somehow jinx us!
After handling my Dad’s death and all finances for my Mom afterwards, the policies were blessings. It helped my Mom, and allowed my siblings and I take care of everything for Mom. If you have kids, it is a must.
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