In most life insurance policies, the insurance company includes a delay clause which enables the insurance company to delay the policy proceeds or payment of cash payout value for a set period of time. This clause leaves the life insurance company with two options: (1) pay the policy; or (2) deny the policy and file a lawsuit against all potential beneficiaries. Typically, life insurance companies will pay proceeds in a timely manner, upon receiving proper documentation, including a death certificate and beneficiary claim form. If you have submitted a death certificate and beneficiary claim form and you do not receive policy proceeds within 30-days, your insurance company may be gearing up to deny your claim or may be getting ready to pay another party. Once you have submitted documentation to the life insurance company and the insurer does not pay, the life insurance company is indicating that it is delaying your claim because it needs time to find a reason to deny the claim or interplead the claim.  Typically, beneficiaries are not familiar with their life insurance rights or beneficiary rights. Often times, interpleader defendants do not understand when a life insurance company is violating their legal rights. Often a life insurance company may be significantly undervaluing your life insurance claim. Hiring a life insurance lawyer to fight a life insurance company can help get a claim adjudicated or help the insurer make an interpleader decision. Simply, the insurance company must determine whether to pay a party or interplead the funds. An interpleader lawyer will fight to make sure life insurance companies pay what a beneficiary is entitled to.

There are several reasons claims get delayed: The beneficiary is a minor, the insured did not name their spouse, insured resided in a community property state, a will and trust is named beneficiary of the policy, insured named relatives by nicknames as beneficiaries, insured failed to name left any beneficiary, no beneficiary ever submitted any beneficiary claim form, a party submitted false documentation on behalf of the insured. Keep in mind: if the life insurance company had a legitimate basis for denying your claim, it would have sent an official denial letter.  The life insurance company is likely on a fishing expedition and will find a reason to deny your claim, from whatever angle of information they can find. Some examples of life insurance delay include:

• • Material Misrepresentation: Material misrepresentation occurs when the insured dies within two (2) years of the policy inception date or the date that the insured took out the life insurance policy. In Florida, if the insured dies with two years of taking out a life insurance policy, the insurance company can review up to 10 years of the insured’s medical records. If the life insurance company finds that the insured mistakenly omitted or provided fraudulent information on their life insurance application, the life insurance company may deny the claim. A life insurance company may deny a life insurance policy because it claims that the premiums would have been in a different category or it would not have issued life insurance coverage. If a life insurance company finds a discrepancy, it may choose to cancel the policy, deny a claim, or increase policy premiums (if the insured is still living). Some life insurance companies even try to cancel policies after the two year period has expired. A life insurance company may have unlawfully investigated a claim for material misrepresentation if it investigated the claim beyond two years. In the State of Florida, the insurer must prove that the information it alleges that was not provided would have been sufficient enough for the insurer to not have issued the policy had they known the information that was not disclosed. In Florida, insurers may have waived their right to deny a claim due to material misrepresentation if it allowed the insured to pay the premium for an extended amount of time.
  • Two-Year Inception Clause: life insurance companies have a two year period to investigate – for instance, if a life policy was initiated on May 5, 2020, the life insurance company has the option to withhold payment out the life policy if the insured passed away prior to May 6, 2022 after the policy’s inception date.

Does appealing to a life insurance agent help speed up a life insurance denial? A common misconception: appealing to a life insurance agent about your case, may help resolve your delay of life insurance payment. In reality, this does not help the process move in favor of the beneficiary.  The life insurance company will record the conversation and use whatever information it gathered against you, including to deny your benefit claim. Life insurance companies have one main goal, and it is to deny your claim, if possible. The more money that a life insurance company keeps, the more money it makes. Having a life insurance lawyer is important for your claim.  A life lawyer will support streamlining your life insurance claim process while in a delay phase and increases the speed of claim processing. Once a life claim is denied, it is much more challenging to receive payment, however, in many instances it provides the beneficiary with the option to file a lawsuit. A life insurance beneficiary should be proactive and reaching out to a lawyer is a great way to learn about your rights, and may even help protect your right to a life policy, including to help ensure the value of your life policy isn’t decreased by a low ball offer.

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.