It’s just not right. A family loses a loved one, and the insurance company denies the life insurance benefits that were purchased to protect them. The reasons for the denial of benefits often seem to make no sense.

Life Insurance Claim Denials

Every life insurance company knows how important it is to pay benefits promptly after the death of an insured. Family members often need the benefits to maintain a home or take care of children. But when these survivors are at their most vulnerable, grieving the loss of a loved one, some insurance companies take advantage of them and deny benefits. Many of these insurance policies are governed by the Employee Retirement Income Security Act (ERISA), which allows insurers to use obscure rules that most lawyers do not understand.

Excuses Life Insurance Companies Use for Denying Benefits

Sometimes the insurance company claims that the deceased person made a mistake filling out a form years ago, and the insurance company now labels this “misrepresentation or fraud.” In other cases, the insurance company says there was an exclusion in the fine print of the insurance policy that allows them to deny coverage. Sometimes the insurance company even sends a condolence letter one day and a denial letter the next. The family’s attempts to convince the insurance company to do the right thing go nowhere. The denial letters just add to the suffering of the grieving survivors.

Life Insurance Beneficiary Disputes

I also frequently encounter life insurance claims where there is a dispute over the proper beneficiary of a life insurance policy. This can happen in a number of situations. It is especially common when a divorced person dies without changing his or her life insurance beneficiary from a former spouse. Current family members are surprised to learn that the former spouse may reap an unintended windfall. It is essential in these cases to act quickly to protect your rights before the life insurance proceeds are distributed.