It is important to know what to do, as purchasing life insurance may dismiss the beneficiary’s claim.
Insurers carefully review their policy terms before paying claims to ensure that policyholders are fulfilling their obligations.
If the insurance company determines that you have violated your policy’s terms, you will not be able to refund your premium to your property. You will not be able to pay your beneficiaries anything.
Do not give insurance companies an excuse to deny your claim.
Four things can lead to a refusal to claim a life insurance policy.
- Death occurred during the challenge period.
The policy has a challenging period that is usually valid for two years after purchase.
If you die within the challenge period, which typically lasts two years from the date you purchased the policy, the insurance company may investigate whether you have entered the correct information on your life insurance application.
If you lie about something in your application, the insurance company may refuse to pay the benefits of death, even if the cause of death has nothing to do with misrepresentation.
For example, if you lie about your medical condition but die in a car accident with nothing to do with your medical condition, your insurance company can refuse the death benefit.
However, minor omissions, such as not reporting a doctor’s visit last year, may not cause a refusal.
If you survive the challenge period, such misrepresentations usually do not prevent you from paying profits.
The insurer believes the purchase was made with a plan to assassinate the insured and recover profits. The claim will be denied even after the opposition period has expired.
- the policy does not cover the type of death.
Life insurers once used a variety of exclusions focused on the type of death. The approval time is 24 hours to 8 weeks.
The only exclusion from life insurance policies that are widely used today is death from suicide. However, even exemptions from suicide usually do not apply if he dies after the challenge period.
- We did not disclose related personal information.
The most common reason insurance companies deny life’s benefit is if they don’t disclose the information they need to measure the risk of paying insurance claims accurately.
If you apply for coverage and don’t answer the question honestly, that’s why they deny your claim.
Not all inaccurate information, such as entering the wrong address or driver’s license number, is the reason for the refusal. At the end of the challenge period, these convictions are usually not used to deny the allegations.
Even if discovered after the end of the challenge period, some misrepresentations of the facts are the reason for refusing or reducing death benefits.
For example, if an insurance company finds out that you have persuaded your doctor to provide false information to hide your medical condition, this is a reason to refuse your death benefit claim.
- You couldn’t keep up with Policy Premium.
The insurance company strictly binds the policyholder to the terms of the policy. The life insurance policies cannot be collected if premiums are allowed to expire.
The older policyholders often cause memory problems, miss payments, and result in policy cancellations. Policies usually have a grace period of at least 30 days during which you can pay premiums, and no interest is charged.
One way to prevent the policy from expiring is to deduct premium payments from your check account automatically.
Cash value insurance, such as full life insurance, often includes provisions that allow insurance companies to borrow from the insurance value and pay overdue premiums. However, this protects the policy only if sufficient cash value remains.
Challenge the decision to refuse a life insurance claim
For beneficiaries who believe their life insurance claims have been improperly rejected, the first step is to contact the insurance company. Each carrier has an appealing process.
If the insurer can prove that the decision was wrong, the issue can be managed administratively without going to court.
Seek professional legal advice to ensure that you understand your rights before you challenge the refusal of a claim.
It isn’t easy to persuade insurance companies to overturn their decisions. The carrier will take the complaint more seriously if the attorney is involved in the case.