When you take out a life insurance policy, you expect your beneficiaries to receive a payout upon your death. However, it is not guaranteed. The cause of death of the policyholder is a crucial consideration. It could determine whether or not the beneficiaries will receive death benefits.
Below are some circumstances when a life insurance claim may be denied.
Reasons to deny your life insurance claim
One of the key characteristics of insurable risks, such as death, is that it should be accidental and not intentional. For instance, if someone dies while engaging in a risky activity such as scuba diving or bungee jumping or if the beneficiary was involved in their death, the claim may be denied. Claims arising from death that occurred while engaging in criminal activity such as drunk driving or robbery will suffer a similar fate.
Suicide may also be a reason to deny death benefits if it happens shortly after taking the policy, and the policyholder’s actions knowingly took their life. It is important to note that the unique circumstances of each suicide case will determine the decision to deny or accept a claim.
Dealing with a denied claim
If your claim has been denied, it is crucial to understand the reasons behind the insurer’s decision. It could be because of unpaid premiums or uncertainty about the cause of death, among other reasons.
You can appeal and ask the insurer to reconsider their decision to deny your claim. If that fails, you may turn to the courts for relief. It is against the law for an insurance company to act in bad faith by denying a valid claim.
It is prudent to have your case reviewed and evaluated before filing a bad faith lawsuit against the insurer. With the right advice, you will be better placed to make decisions that are in your best interests.
