Life Insurance Lapse- Can A Life Insurance Company Deny My Life Insurance Claim?

life insurance lapse

Written by Christopher J. Brochu

Our firm's philosophy revolves around aggressive representation, client transparency, and cost-effective representation. We don’t represent big insurance companies. Our clients are people just like you! At Brochu Law, we recognize that each client is unique, and we tailor our services to fit your needs. Our firm represents our clients on a contingency fee basis. Plainly, we only get paid if you get paid.
June 28, 2022

Life insurance lapse occurs more often than you may think. Most people know that a life insurance policy may lapse when the insured fails to pay premiums on their life insurance policy. However, there are many steps that the life insurance company must take prior to denying a life insurance payment. Mistakes made by the insured may result in your life insurance company treating the insured, and their beneficiaries, unfairly. Even in instances where the insured has consistently paid life insurance policy premiums for decades, the life insurance company may still deny claims made by beneficiaries due to a lapse in the life insurance policy. Unfortunately, some beneficiaries may lose hope and will not investigate a life insurance claim in a timely manner and will give up when a life insurance company denies due to life insurance premium lapse. 

Life insurance companies deny claims all the time. Denying a life claim due to lapse can cause many problems for beneficiaries, spouses, children, and others, and yet, the beneficiary may still have several options. For instance, did the life insurance company provide the insured with the proper notice? In certain states, did the life insurance company notify all persons listed on the policy? Did the life insurance policy lapse before the state statutory requirement or grace period? Was the insured current on life insurance premiums? Did the life insurance company reinstate the life insurance policy and then deny later? Did the life insurance company unlawfully deny reinstatement of the policy? All of the scenarios listed with require exploration. When beneficiaries, or the insured, look to resolve a life insurance claim, your life insurance company may investigate the claim by asking leading questions, duplicative questions, request medical information that the insurance company is not entitled to, and by looking for legal loopholes to deny your beneficiary claim based on the answers you provided. Life insurance companies may attempt to frustrate and exhaust the insured and/or beneficiary to push the insured and/or beneficiary to withdraw from pursuing their life insurance claim. An attorney may help a beneficiary avoid unlawful and shady tactics that some life insurance companies use. Sometimes, even the most sound life insurance claim can be unlawfully delayed or denied.

There are several ways a lawyer may be able to assist in a lapse in policy dispute between the insurer and the insured and/or beneficiaries. For example, the life insurance company may notify the insured that a lapse has occurred due to failure to make payment on the life policy and the insurer has chosen not to reinstate the life policy. In one case, we found that the insurer falsely claimed that the insured failed to make all premiums. In fact, the insured had made all payments and the insurer improperly recorded a payment shortly before the insured died. The insured had paid their monthly premiums on the life insurance policy. The life insurer was required to reinstate the life insurance policy and payout the life policy. If a life insurance policy lapses, the insured or the beneficiary (if the insured is deceased) may benefit from contacting a lawyer. The insured and/or beneficiaries can become discouraged by trying to understand the various complexities regarding their loved one’s life insurance policy. The insured and/or beneficiary may not be familiar with some of the terminology or language regarding policy lapse, reinstatement, or tactics the life insurance company may use to strengthen its reasons for denial, not reinstating the policy or withdrawing policy benefits.  A lawyer is equipped with the professional skills to understand policies and navigate the lapse and/or reinstatement process.

On-time premium payments will ensure that your life insurance policy remains in effect. In the event of missing a payment, some life insurance policies and most state laws provide that the insured receive a grace period between 31-60 days or greater where the insured can catch up on any missed premiums. Nevertheless, if the insured fails to pay premiums during the grace period the policy may lapse due to non-payment of the premiums. If a policy lapses, the life insurance company may require all delinquent premiums be fulfilled prior to reinstatement. However, every life insurance company is different, state laws may vary, and the parameters of reinstatement may vary depending on the life insurance policy, state law, and federal law. For instance, in addition to delinquent premiums, the insured may be required to pay penalties and interest on unpaid premiums following a life insurance lapse. Life insurance disputes are time sensitive. It is important to contact a lawyer if you need assistance resolving an issue with an life insurance company.  Brochu Law represents beneficiaries, widows, spouses, and children on a contingency fee basis, there is no fee unless you win. Brochu Law advances all costs on your behalf in a life insurance dispute, interpleader or lawsuit. Costs are not included with attorney’s fees, however, the beneficiary will only have to reimburse costs if we obtain a settlement, judgment, or trial award. Having legal representation may help a beneficiary fight back against a life insurance company and protect their loved one’s investment.

Brochu Law, PLLC represents Life Insurance Claims on a contingency fee basis. There is no fee unless you win. We advance all costs on behalf of military families and consumers.

Brochu Law, PLLC represents military families and consumers nationwide*

*Disclaimer –Christopher J. Brochu, Esq. is licensed to practice law in the State of Florida. Brochu Law, PLLC works with co-counsel in accordance with state and federal law.