Life insurance should not be a choice; instead it should be a requirement if you want to protect yourself and your loved ones. Because, in the event of your death, the money gotten from your life insurance plan will be handed over to your loved ones. You can also receive money from this policy if you ever become permanently handicapped throughout the process of your life. Hence, it is essential that you understand that when you are buying a life insurance plan, you are not shopping for grocery in the store; you are essentially purchasing a financial security blanket which will provide the much-needed warmth and comfort for your family when the storms of life hit hard.
However, many People purchase life insurance policy to ensure that their dependents will enjoy the same lifestyle and will not face any financial trouble even if they pass away. Financial support is promised to the surviving beneficiary through the insurance policy. Unfortunately, when people die, insurance companies look for excuses to deny pay out claims. Like any big business, insurance companies want to minimize their expenses. Refusing thousands of dollars’ worth of payouts to deserving beneficiaries is a way for them to do so. If they are unable to deny a claim based on the “cause of death” then they will find an alternative route. Alleging that there is a misstatement in the application is grounds for denial.
Hence, life insurance claim denial can be a terrible experience if you are a beneficiary trying to stake a claim for receiving a life insurance policy payout. Thus life insurance carriers may reject your insurance claims for several reasons. Failure to pay life insurance premiums can be one of the reasons why an insurer decides to decline a claim for benefits. Perhaps, the cause of the policyholder’s death is not covered by the terms and conditions of the policy.
But the most prominent reason why a life insurance company denies a claim is on the grounds of “material misrepresentation”. It is a state law that governs insurance practice, but in the great majority of states material misrepresentation apparently means that the insured answered a question on the insurance application which, if that question had been answered truthfully, should have resulted in the insurance company denying insurance coverage, either in the amount applied for or entirely. However, If you believe that the rejection of your claims is unjust and unreasonable or deem yourself as a victim of potential fraud, you have the right to dispute the denial of your claim.
- Put all life insurance policy documents in order and acquaint yourself with the terms and conditions of the policy. A tag on any paperwork that attests your communications with the insurance carrier and all proof of payment to the insurance company.
- Contact the insurance provider and have a word with the supervisor of the adjuster who actually rejected your claim. Tell them that you believe that the denial of your claim is done without good reason and ask for a compelling explanation for the denial. If there are any required documents that you can resend to the company, like a notarized copy of the policyholder’s death certificate, then resend it. If you still at odds with the rejection of the policy, then request for the certified copy of the policy.
III. Ask them to review your life insurance claim. Send them a letter stating your reasons why you believe that the rejection was incongruously made. Attach any copies of important papers that could support your claim. Wait for 10 business days and get in touch with the insurance carrier to see if your life insurance claim has been reopened. If not, proceed to the next steps.
- Call or visit the Department of Insurance or Insurance Commission in your state where your life insurance policy was issued. Rummage around for contact information for the Department of Insurance in the phone directory or by performing a simple internet search.
- Submit a completed form to have the unseemly insurance claim rejection investigated. You can download the form to dispute an unreasonable insurance decision on most Department of Insurance websites. You can also contact the department and ask for a form. Moreover, do not forget to indicate necessary information such as the type of claim, the claim number, policy number, name of the insurance company, and a brief statement of your problem and recommended workable solutions.
- File the complaint of improper denial to the Department of Insurance along with your supporting documents, policy information and correspondence to examine the claim.
Conversely, if you have been denied claim money after a loved one has passed, you can receive help. Contact a life insurance claims attorney. An insurance attorney is experienced in insurance law, applications, terminology, and practice. An attorney will take an aggressive approach to negotiating with your life insurance company. If the insurance company continues to deny your claim, the attorney will take them to court to prove your claim.