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In either scenario, an insurance company has far more to gain from not paying a claim than by paying it. The insurance companies employ legions of actuaries to assess the risks when they issue life insurance policies. Profitability is guaranteed. But, when an insurer denies a life insurance claim, it is creating an enormous windfall which helps prop up its corporate bottom line.
When an insurance company denies a life insurance claim it is adding insult to injury for the beneficiaries who are still grieving for the loss of a loved one. The anger and resentment felt by beneficiaries due to life insurance denials is substantial. For this reason, it is recommended that beneficiaries do not attempt to appeal these cases without the assistance of counsel. Many life insurance cases are subject to the Employee Retirement Income Security Act of 1974 (ERISA). Most ERISA claims usually allow only a single appeal. If the appeal is denied, you will be forced to go to federal court with the claim based solely on the administrative record. In most cases, you will not be allowed to submit any new evidence after the final appeal denial. Should you wish to file a lawsuit, there usually will be no jury or testifying witnesses. The entire proceeding may be based on the insurer’s claim record alone. This places claimant’s at a terrible disadvantage if they attempt to “go it alone.”
You cannot take afford the risk of making an appeal to an insurer who has already demonstrated its intention to deny a claim without knowing the applicable law and gathering the necessary evidence to win the claim at the administrative level, or, if necessary, in federal court. An appeal of a claim without gathering the necessary evidence will usually result in a denial which cannot be appealed successfully. Remember, when an insurer reviews an appeal, it is akin to “a fox guarding a hen house.” If the insurer could not be trusted to approve the claim upon the initial application, why should it act differently when you appeal the claim to the very same people who denied it.
There are several common denial strategies that insurers will employ for the purpose of avoiding the liability of paying a life insurance claim. Typically, an insurer will point to the initial application for the purpose of claiming fraud in the procurement of the policy. A favorite tactic is the use of a pre-existing limitation clause. This clause usually reads that death due to a pre-existing condition which was not disclosed to the insurer will void the policy. This would seem rather unfair since the insurer usually has the person procuring the policy undergo a medical examination including blood tests as well as giving a complete list of treatment providers for past years. This premise is embodied in the “incontestable period” provision in most policies. This provision states that an insurer has a limited period of time to investigate the insured and void the policy. Otherwise, the insurer will waive its right to contest the policy. Unfortunately, insurers will try to advance a fraud claim to dissuade beneficiaries from litigating claims in order to avoid substantial liability posed by life insurance claims payouts.
Another clause which has resulted in substantial litigation is the “self-inflicted injury” in cases of accidental death. Depending on the jurisdiction, activities such as drunken driving, dangerous behavior, and auto-erotic asphyxiation have been found to be “self-inflicted” injuries for which claim denials have been upheld in court. Whenever you are confronted with such a claim denial, it is essential to retain experienced legal counsel for assistance.
Many other issues have arisen in life insurance litigation including fraudulent misrepresentation by agents, negligent failure to issue policies, improper policy issuance, among many others. These causes of action will not be made evident to a claim beneficiary who typically is still in the grieving process and will not wish to investigate a potential claim against an insurer for its failure to pay a claim. The insurers absolutely are aware of a beneficiary’s sense of being overwhelmed by the many details caused by the death of a loved one. For this reason, you should contact competent legal counsel in order to investigate the claim denial and, if merit worthy, compel the insurer through the legal process to pay the sums due and owing.
The old adage states: "Fool me once, shame on you. Fool me twice shame on me." In these cases, the insurer only needs to fool you once to avoid all liability of a claim. You will not be entitled to a second chance at your claim. This is why it is so important that you seek help with such complicated matters and do not depend on the judgement of others who are not knowledgeable and experienced concerning life insurance claims.
801 Roeder Rd., Ste. 550 Silver Spring, MD 20910
Phone: 301-495-6665
Toll Free: 1-866-NEED-LTD (633-3583)
Privacy Policy & Web Site Disclaimer:
We collect only the personal information you provide to us and we do not distribute it to any third parites. Any legal information offered by Elkind & Shea, The Disability Benefits Law Firm, regarding social security disability benefits, long term disability benefits, short term disability benefits, ERISA, long term care denial and life insurance denial or other legal information offered herein is not formal legal advice nor the formation of an attorney client relationship. All communications with counsel are confidential in accordance with the applicable Rules of Professional Responsibility which require that even consultations without retention are held confidential.
We collect only the personal information you provide to us and we do not distribute it to any third parites. Any legal information offered by Elkind & Shea, The Disability Benefits Law Firm, regarding social security disability benefits, long term disability benefits, short term disability benefits, ERISA, long term care denial and life insurance denial or other legal information offered herein is not formal legal advice nor the formation of an attorney client relationship. All communications with counsel are confidential in accordance with the applicable Rules of Professional Responsibility which require that even consultations without retention are held confidential.