What To Do If A Life Insurance Claim Is Denied Or Delayed
The Texas Department of Insurance states that “as long as they keep up the payments,” a life insurance policy should provide beneficiaries with financial support after the policyholder dies. All too often, this proves to be incorrect. Even after diligently paying their premiums for many years, families may receive the news that their life insurance claims have been denied by their insurers. Families may also struggle with delayed life insurance claims. These delays can heighten financial pressures that often accompany deaths in the family, causing needless desperation for those who are already grieving. Those who face these issues may decide to contact life insurance attorneys in Houston. These legal professionals may be able to help families push back against life insurance companies. Legal assistance from a life insurance attorney could ensure the prompt payment of benefits, even after a denied claim. Consider continuing this conversation by contacting the Law Office of Troy M. Moore, PLLC at (281) 970-8039.
Life Insurance Companies Must Follow Certain Rules When Handling Your Claim
Texas imposes strict rules for life insurance companies, and many of these rules apply after a family files their claim. The Texas Department of Insurance states that all insurance companies must respond to a claim 15 days after the family files it. If the insurance company informs the family in writing that they need more time, they may receive an additional 45 days to provide further information. The Texas Office of Public Insurance Counsel (OPIC) also notes that a life insurance company must pay claims “promptly.” If the beneficiary does not receive payment within two months after providing proof of death, the insurance company may face consequences. OPIC also notes that insurance companies may have to pay beneficiaries interest on delayed death benefits.
What Happens if a Life Insurance Company Delays Payment?
If a life insurance company delays payment past the limits set by Texas law, it may face various consequences. Perhaps most obviously, it must pay the full claim amount. It may also need to pay the beneficiary interest for the delay, and the interest rate is quite high. Finally, the insurance company may become liable for any legal fees the family has incurred while trying to recover the life insurance benefits. This additional compensation may make families feel more comfortable about legal assistance when addressing this issue. Families can contact the Law Office of Troy M. Moore, PLLC to learn more about how legal fees may be covered in this scenario. With a system of contingency fees, families should not have to pay out-of-pocket for legal costs when addressing delayed claims.
Why Do Insurers Deny Life Insurance Claims in Texas?
Families dealing with denied life insurance claims should carefully review their denial letters. State law requires insurers to use clear, easy-to-understand language when drafting these letters. It should be easy to comprehend the reasons for a denied claim, and families can work with lawyers to review the specific reasons for these denials.
The Failure to Pay Premiums Could Lead to Denials
An insurance company can deny a life insurance claim if the policyholder failed to pay their premiums. The contract between the insurer and the insured requires the policyholder to pay their premiums on time. Late or missing payments may nullify the agreement, preventing the family from receiving benefits after the death of the policyholder. However, OPIC notes that a missing payment does not always nullify the insurance policy. A policyholder can simply pay the past due premium with interest to reinstate a lapsed policy.
In addition, most insurers give policyholders a 31-day grace period to cover late payments. During this grace period, policyholders should not face additional charges, and they should not lose coverage. A policyholder may pass away during this grace period, and their beneficiaries should still receive benefits. Those who face denied claims based on missing or late premiums may want to review their situations with experienced life insurance lawyers. Families may still be eligible to receive benefits, even after late or delayed payments.
The Type of Death May Not Be Covered
Some insurers may deny life insurance claims after policyholders die in certain ways. Perhaps the most obvious example is suicide, which generally leads to a denied claim. Deaths involving illegal activities may also lead to denied claims. For example, an overdose on illegal drugs could lead to a denied claim. Deaths related to extreme sports or similarly dangerous activities may lead to denials as well. A family may want to carefully review the fine print of the policy to determine whether a denied claim is justified based on the circumstances of the fatality.
The Dangers of Providing False Information on the Initial Application
False information when applying for life insurance could make it impossible to recover benefits. The most important information during these applications generally involves medical issues. Some questions may also cover lifestyle choices, such as smoking and heavy drinking. Generally speaking, misrepresenting the truth during your application can make the entire policy void. If an insurance company alleges that a policyholder lied on their application, it may be worth exploring these accusations with a lawyer. Sometimes, these “lies” are nothing more than simple mistakes, and they should not lead to denied claims.
Learn More About Denied Life Insurance Claims With the Law Office of Troy M. Moore, PLLC
While insurance companies often deny life insurance claims for the same reasons, each denial is slightly different. Online research may provide certain insights, but a life insurance lawyer in Houston could offer more targeted, personalized guidance. For example, a lawyer may be able to review the “fine print” of a life insurance policy before advising a family on their next steps. Policyholders have important rights in Texas, and a lawyer could help you fight for those rights. Sometimes, denials or delays are due to relatively simple errors. Insurance companies may be willing to make things right after a lawyer highlights these errors. In other situations, more extensive legal action may be necessary to hold insurance companies accountable. Continue this conversation by contacting a life insurance lawyer from the Law Office of Troy M. Moore, PLLC at (281) 970-8039.