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My life insurance claim has been denied. What are my options?

Shawn E. McDermott

Losing a loved one is one of the most difficult experiences that anyone can face in life. While grieving such a loss, you might learn that your loved one named you as a beneficiary of their life insurance coverage.

If your loved one faithfully paid their insurance premiums, filing a claim and receiving the compensation you are entitled shouldn’t be a daunting task. Unfortunately, this is not always the case for some beneficiaries. If an insurance company wrongfully denies your claim, you’ll need to know what informed that decision and whether you can file an appeal.

Why a life insurance claim may be denied

Insurance companies deny claims for a variety of reasons. While some may be valid, others may not be. Here are common reasons why an insurance company might deny your claim:

  • If your loved one’s death occurred during a policy’s contestability period – In Colorado, this is usually the first two years of the policy
  • Non-payment of premiums or lapse in policy – A life insurance will only be active as long as the policyholder is up to date on their payments
  • If the policyholder withheld crucial information, like a pre-existing condition

If you believe that a claim’s denial was unjustified, you’ll need to fight it. Here are some of the steps you can take to appeal a denied life insurance claim.

Understand the reasons for the denial

Start off by reviewing the denial letter to understand what informed the insurance company’s decision. Was the denial based on information that your loved one provided while signing up? Was it based on any state law? Understanding the reasons for the denial will help you come up with grounds for an effective appeal.

Prepare your appeal

Once you know why your life insurance claim was denied, you’ll need to go ahead and gather the documentation necessary for your appeal.

Protect your rights

Most often, insurance companies keep their word and pay benefits to a rightful beneficiary following the policyholder’s demise. However, if your life insurance claim has been denied, you should not give up, especially if you believe that the denial was erroneous. Instead, seek legal guidance and file an appeal if you have grounds upon which to do so successfully.

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