The death of a loved one can be an incredibly difficult experience to bear. Fortunately, many people take out life insurance policies that provide essential income in the event of a death to cover everything from funeral costs to tax bills.
However, the claims process for these benefits is not always easy. While it should be a foregone conclusion that a person’s death will trigger the payout of a life insurance policy, the companies that administer these policies often make a profit when they can collect premiums but not pay out benefits. Denials are unfortunately common, and the appeals process is rarely simple.
A life insurance denial lawyer in Los Angeles, Claremont, and Pasadena can help you appeal these denials and seek enforcement of your policy by working with you to analyze your options and identify a strategy to provide you with a better chance of success. Call a compassionate attorney today to get started on your claim.
Potential Reasons for a Life Insurance Denial
Life insurance is a simple concept: a person takes out a policy on another person’s or their own life, and when the subject of the policy passes away, the beneficiary collects the value of the policy. However, there are specific times when a person can never collect on a life insurance policy.
Although rare, companies can always deny claims if the death was related to a suicide within two years of the policy going into effect or some form of homicide committed by the beneficiary. Far more common are denials related to the application process.
Life insurance policyholders are required to be truthful on their applications, especially concerning their age and medical history. Insurance companies may deny a claim by stating that the applicant was not truthful during the application process. Companies have two years after the application to make this decision and notify the policyholder accordingly.
Rescission of Life Insurance Policies
Using a concept known as rescission, insurance companies may deny that a valid life insurance policy ever existed in the first place. According to California Civil Code §1691, a party that wishes to rescind on a contract—including that for a life insurance policy—must do so as soon as false information is discovered.
After reviewing a case, an LA County life insurance denial attorney can argue that an insurance company’s rescission of their policy was made too late to be legal. In these cases, the beneficiary will have a cause of action to take the case to court.
What to Do After a Denial of Life Insurance Benefits
Any time that a life insurance company denies a claim, they must state the reason for the denial in a letter to the policyholder. It must also provide instructions for a person to appeal this denial through that company’s individualized appeals process.
If this appeals process fails to restore the benefits, the denied beneficiary has a cause of action to file a lawsuit. Many such lawsuits argue that the insurance company has acted in bad faith by refusing to honor their policy.
California Business and Professions Code §17204 creates a specific cause of action allowing consumers to sue any company that has acted in bad faith. Additionally, a customer may allege that the insurance company has breached their contract with them by wrongfully failing to uphold their end of the agreement.
How a Pasadena Life Insurance Denial Attorney Can Help
People obtain life insurance in order to provide peace of mind and financial security in the event of a sudden or unexpected death. Unfortunately, insurance companies can rob people of this security by denying valid claims and making the entire process more difficult than it needs to be.
In the event of such a denial, a life insurance denial lawyer Los Angeles, Claremont, and Pasadena can apply the stated reasons for that denial to the facts of the case and applicable law and develop strategies to appeal that denial. Whether benefits are pursued through the appeals process or through the courts, a qualified attorney can help. Reach out today to schedule a consultation.
