When Your Life Insurance Claim
Has Been Denied

Published by the Law Offices of Bruce Colodny

By Bruce Colodny, Attorney at Law, copyright © 2013

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There are several reasons why an insurance company may refuse to pay a claim, but the reasons are not always justified.  If your claim is denied, you should not just take the word of the insurance company, nor should you accept the insurance company’s check refunding the premiums paid on the policy, instead you should immediately call to seek the advice of Attorney Bruce Colodny. 

All too frequently we’ll read stories telling of someone that has taken out a life insurance policy to protect their loved ones in the event of their death and the insurance company denies the claim when it’s submitted by the beneficiary for reasons that seem unjustified.

According to data compiled by the National Association of Insurance Commissioners, by and large, life insurance companies have denied claims from beneficiaries of $372 million last year, an amount that has doubled in the last decade even though sales of policies have gone down.

The claims of thousands of beneficiaries are denied or disputed every year — more than 5,000 last year alone — many for allegedly flawed applications. The No. 1 reason, accounting for about two thirds of disputes last year, is "material misrepresentation." That's failing to disclose information that insurers deem important in assessing risk, and it allows insurers to rescind coverage altogether.

Please remember that the insured took out the policy and paid premiums on it, probably for years, so that you would be protected in the event of their death.  This protection should not be taken from you.  Our firm has been extremely successful in getting claims paid when the insurance company denies that they owe the money to the beneficiary. 

The foremost reason a life insurance company denies a claim is on grounds of "material misrepresentation". This means that they believe 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. The life insurance company may argue that there was a false statement or an omission on the application.

Another reason why a claim has not been paid is that the life insurance company has received claims from more than one person.  Competing claims are sometimes made by former spouses (perhaps due to some ambiguity or vagueness in a divorce case) or the life insurance company may take the position that a change of beneficiary request (for example, prior to marriage, a man may have had his mother designated as the beneficiary on the policy but then requested the beneficiary be changed to his new wife after he marries, but the life insurance company claims that the request to change the beneficiary was either not received or was defective in some manner).

If you can’t find the policy, the insurance company may tell you that they can’t pay unless or until you have the policy in hand, when actually, as the policy is listed in a database, they can look up the information within minutes.   

Practically every life insurance policy has a two-year exclusion clause with regards to suicide--that is, if the insured committed suicide within two years after the policy was issued.  This is to prevent an individual from taking out a policy when they are planning on taking their own life. 

If you claim has been denied for any reason please call us at 1-800-560- 8000 so that we can protect your interests. 

ABOUT US

Bruce Colodny has been a practicing California attorney for 29 years and is admitted to practice before all the State and Federal District Courts in California, as well as the Ninth Circuit of the United States Court of Appeal and the United States Supreme Court.  

Our experienced staff is experienced and trained to assist you if your claim with a life insurance company has been denied.  Do not hesitate to contact us so that we can assist you.  

Please contact us at 800-560-8000

Disclaimer:  The above is subject to change as a result of future court decisions and/or new legislation and is intended only as general information.  For advice concerning a specific situation you should contact a qualified California attorney.