Life Insurance Policy Claim Denied?
CALIFORNIA INSURANCE LAW FIRM GIANELLI & MORRIS CAN HELP YOU GET THE BENEFITS THAT ARE RIGHTFULLY YOURS
Insurance companies deny life insurance benefits just when you need it most
Providing for the financial security of your family after you are gone is a top concern of most breadwinners, and life insurance is one of the main ways most people choose to gain this peace of mind. Life insurance can be critical to helping surviving family members replace lost income, keep up with mortgage payments, and pay estate taxes and other probate costs without having to sell off property or spend their inheritance on a funeral, burial and other final expenses.
Unfortunately, many life insurance beneficiaries are shocked when they file a claim, only to discover that the insurance company refuses to pay. You’ve counted on this benefit all your life, and now that you finally need it, it’s simply not there. At Gianelli & Morris, our lawyers know California insurance law and life insurance policies. We know when you’re being treated fairly and when you’re not. We’ve spent decades devoted to helping families receive the benefits of insurance they have purchased, despite the roadblocks thrown in their path by bad faith insurance practices. If your California life insurance policy claim has been denied and you don’t know what to do, call Gianelli & Morris for a no-cost, confidential consultation. We’ll take the time to understand your situation and let you know how we can help. If your insurance company is mistreating you, we’ll do what it takes to make sure they treat you right.
How Does Life Insurance Work?
The basic concept of life insurance is simple enough. Your policy is a contract between you and the insurer where you agree to pay a certain amount of money each period (usually monthly, semi-annually, or annually), and in return, the insurance company promises to pay a certain amount of money to the beneficiary or beneficiaries named in your policy if you die.
The two most common types of life insurance are term policies and whole life policies. With a term policy, your policy stays in effect for a certain length of time depending on the term you choose (typically 10, 20 or 30 years), so long as you continue to pay premiums when they come due. At the end of the term or if you stop paying premiums, your policy expires and is no longer effective. With a whole life policy, you build value (equity) over time through your premium payments. If you stop paying premiums at some point, you will have a cash value built up that is yours to redeem by surrendering the policy. Whole life then acts as both a life insurance policy and a financial investment. Some whole life policies even pay dividends from time to time, which can be used as cash or reinvested to lower premiums and increase the value of your policy.
There are other types of permanent life insurance besides whole life, such as universal life, variable life, and even variable-universal life insurance policies. Accidental death and dismemberment (AD&D) policies also provide a death benefit, although these benefits are limited to accidental death only and therefore apply much less often than term life or whole life policies. AD&D insurance provides benefits for accidental injury as well and is worth considering in addition to life insurance or long-term disability insurance, but it is not a replacement for either.
Besides purchasing life insurance on your own, you may also be covered as a military servicemember (SGLI), a federal employee (FEGLI) or as a fringe benefit through your job. Many employer-sponsored plans are governed by ERISA, a federal law placing additional rules on covered life insurance policies. One common thread regardless of the type of coverage is that life insurance policies are complex legal documents stuffed with technical language that insurance companies sometimes hide behind when it comes time to pay a valid claim.
How are Life Insurance Claims Mishandled?
Not all life insurance companies are created equal, and not all life insurance claims are treated fairly. Insurance companies will sometimes go to great lengths to find a way out of having to pay, especially if the claim is large. While there are many different tactics insurance companies use to avoid paying claims, some of the most common are listed below:
Lapse – If you fail to pay your premiums in full and on time, your policy may lapse, meaning it won’t be enforced and you won’t be covered. As the beneficiary on a life insurance policy of a spouse or parent who has died, your first notification that the policy has lapsed may come when you make the claim for death benefits under the policy. They may claim payment was never received or that it was not paid on time, or there may be a dispute over the amount of premium needed to keep a policy in force. You may know you paid, but proving the facts surrounding an alleged lapsed payment can be difficult, especially if the deceased insured was the one in the family responsible for making payments and managing the family’s finances.
Rescission – Rescission is another term for cancellation. One way insurance companies find to avoid paying a claim is to simply cancel or rescind the policy altogether. They’ll go back to the original application and scour it in detail, and then claim the insured lied on the application or failed to complete a section, so they don’t have to honor the contract. When should the insurance company review a life insurance application for completeness and accuracy: when the person is initially applying for insurance or when the beneficiary is making a claim, after decades of happily accepting premium payments month after month, year after year? Rescinding a life insurance policy in order to avoid paying a claim is an example of insurance bad faith.
Delay – Another example of bad faith insurance is when insurers cause an unreasonable delay in paying benefits. One common tactic is to continually submit requests for information from you before they make a determination. These requests may involve information you literally cannot get your hands on (and they know it), or they may simply be requesting information for the sole purpose of using it against you to deny your claim. You would think that very little information need be provided to submit a claim (such as a death certificate), but life insurance policies can be incredibly lengthy, complex and highly technical documents with hidden traps built in that the average consumer never knows about until making a claim.
The California Insurance Lawyers at Gianelli & Morris can Help!
With over 35 years of experience helping California policyholders, the California insurance law attorneys at Gianelli & Morris are familiar with all the ways insurance companies try to avoid meeting their legal obligations to their policyholders. We go to bat for our clients when their claims for life insurance death benefits are denied, or if a dispute arises regarding the amount of premiums necessary to keep the policy in force or the payment of dividends by mutual insurance companies. Life insurance premium and dividend amounts can make the difference in keeping a life insurance policy in force and avoiding coverage lapse after years of premium payments. If your life insurance premiums suddenly go up or if you are still required to make life insurance premium payments long after you were told those premiums would “vanish,” our life insurance lawyers will stop the carrier from giving you the runaround and make sure you get the benefits you deserve. We’ve been helping California policyholders for decades and are ready to help you too.
Call Gianelli & Morris for Advice and Representation to Resolve Your California Life Insurance Policy Dispute
For help with a life insurance claim denial or other problem with your policy, call the California life insurance law attorneys Gianelli & Morris for a complimentary, confidential consultation at 213-489-1600.