Many people’s estate plans hinge on their life insurance policies. They expect the coverage they carry to pay for their funeral services and also to help their family cover basic living expenses. There are even some people who expect their life insurance policy to fund their child’s special needs trust.
If the company refuses to pay, the beneficiaries expecting that life insurance payment could be left in a difficult situation. What are two of the more common reasons that life insurance companies deny claims?
Someone dies too soon after changing a policy
Whether your loved one recently increased their coverage or they chose to switch to a new insurance company for better coverage or prices, there is a window of time in which they may not have the protection of the policy they just purchased.
Most policies include language that will prevent any payout for the first 30 or 31 days after someone obtained the policy. Some policies will also only offer limited benefits for the first few months or even the first year and only a review of the policy language can help you determine which rules may apply in your case.
Someone dies while committing a crime
One of the few loopholes in life insurance coverage is that companies will not pay if someone dies during the commission of a crime. Criminal activity that leaves to a fatality often voids the coverage available under life insurance policies, leaving the family members who survive with very little support.
Learning more about the rules that govern life insurance claims can help you get the coverage that your family needs.