What to do if your life insurance claim is denied

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“The life of the dead is placed on the memories of the living. ”

— Cicero

Follow these 4 steps if your life insurance company denied your life insurance claim.

Step 1

Contact the insurance company. Ask them for a letter explaining why the claim was denied. The letter should include both facts and policy language. The company is generally required to tell you why the claim was denied.

Also ask them to provide copies of the documents they relied on in denying the claim.

Step 2

Review the life insurance policy. Compare it to the policy language used in the denial letter. Does the insurance company’s denial make sense in light of the policy language?

Don’t despair if it doesn’t make sense, because these policies are extremely confusing. They are not written to be readable. Insurance companies take advantage of poorly written policies because they are stuffed full of exceptions, conditions, and bewildering language. But at least spend 15 minutes skimming through it, especially the language cited by the insurance company in its denial letter.

Step 3

Appeal the denial. Most insurance companies have an internal appeal process. You can guess the likely scenario in that outcome, but at least try. Submit relevant documentation with your appeal (e.g. medical records).

Step 4

Contact an attorney who handles life insurance disputes and denials.

Of course in most cases Steps 1 to 3 are superfluous and you should just start at Step 4. In fact, most attorneys would start working on the case by doing Steps 1 to 3.

An attorney should provide a free consultation, so you have nothing to lose. And most cases will be handled on contingency.

Postscript

Here are a few things to consider as well:

  • Essentially what you have is a contract dispute. You and the life insurance company entered into a contract, the life insurance policy, which sets out obligations you have (e.g. paying the premium) and obligations the life insurance company has (e.g. paying out the policy according to the contract). You need to determine whether the life insurance company failed to fulfill its obligations under the contract.
  •  Prepare for a long fight if the life insurance company denies your claim. Preparing for litigation, and litigation itself, takes a lot of time. Don’t expect the life insurance company to cut a check right after you contest its denial.
  • Keep all relevant documents like medical records, death certificates, letters to and from the life insurance company, and the life insurance policy.
  • Don’t assume a life insurance company made the right decision in its denial. Consult with an attorney. Don’t ever assume the life insurance company has your interests at heart.

Questions? Contact Me for a free consultation.

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