Once you have purchased a new life insurance policy, your beneficiaries are not guaranteed to receive payment on any claim for the first two years of the policy. This is known as the contestability period, and the insurance company uses it to protect itself. It may refuse to pay claims if it finds that there was fraud or the applicant lied on their application. This is when you need to contact a Philadelphia life insurance attorney.
Just because the life insurer has the right to review all claims made within the first two years does not mean that it will deny every claim. The insurance company is still obligated to pay out on claims if someone dies during the contestability period unless the investigation uncovers a reason for the carrier to rescind coverage. However, it does mean that it may take more time to investigate, and it could delay the payment of your claim.
You can expect that insurance companies will always investigate further if the policyholder dies in the first two years. The insurance company will end up paying in a majority of cases. It might ask some more questions depending on the cause of death. You can expect even more inquiry if the cause of death is any of the following:
The insurance company does not, however, have the absolute right to deny every claim. Instead, it must find evidence of material misrepresentation on the policy application. The insurance company may also contest the payment of a claim if it discovers that the payment of policy premiums had lapsed.
If the insurance company does find evidence of inaccuracies on the application, it has three options:
Insurance may still try to deny or reduce the claim even if the cause of death had nothing to do with what it claims was a misrepresentation.
The insurance company does not have the final say if it chooses to deny benefits. The first thing that you can do is to go through the insurance company’s appeals process. This is not always easy to do, especially at a time when you and your family are grieving. Nevertheless, you could try to persuade the life insurance company that it made a mistake. The more likely way to contest the denial of benefits is to file a lawsuit against the insurance company.
If you have filed a claim that was denied by the life insurance company, you have legal rights to appeal. Contact the Philadelphia life insurance attorneys at the Garner Firm to schedule your free initial consultation and learn if you can challenge the decision that denied you the money that you needed.
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