Life Insurance Denial

Life Insurance denials will involve amounts varying from a $5,000 or less burial policy, to policies of a $1,000,000.

The person named to receive the policy benefits, known as the beneficiary, relies on receiving these monies. When the insurance company denies the life insurance claim, it makes a bad situation worse. The mental torture of losing a loved one, is now compounded by the actions of the insurance company. For the majority of people there is also a financial stress that the life insurance policy was suppose to make easier.

In spite of the fact that there may have been years of payments on the policy, the life insurance company, in efforts to save itself money, denies the claim on one or more of many grounds. Some are;

1. citing technical language in the policy,
2. accusing the deceased of fraud when applying for the policy,
3. stating payments were missed or too late,
4. disputes over who is entitled to the life insurance proceeds,
5. issues over the cause of death,
6. claims that "exclusions" in the policy prevent payment.

Other times the life insurance company is simply taking too long to investigate the claim. If more than 60 days have passed since the claim for benefits was submitted, and no payment has been received, then that is an indication the claim is going to be denied. Plus, there are penalties to the insurance company for late payment on a claim.

Often times the claim denial is due to mistakes made by the insurance agent when the policy was purchased.

Other times it is the adjuster doing a poor job investigating the claim.Texas has statutes dealing with the selling, adjusting, and payment of claims. These statutes can hold individual agents and adjusters liable for any conduct that is prohibited by the Texas Insurance Code.

The most common statutes violated by the companies and their agents are found in the Texas Insurance Code, Sections:

• 541.001 - 541.454
• 542.051 - 542.061
• 705.001 - 705.105
• 1101.001 - 1101.056

These are just a few. There are many other statutes dealing with life insurance such as; there are specific statutes dealing with "credit life" policies. There are other issues, such as violations of the Texas Deceptive Trade Practices Act, breach of contract, and negligence, to name a few that are present in these claims.

Violations of these statutes can be punished in several ways, depending of the circumstances and conduct of those involved. When this office gets involved in a life insurance claim it is with the belief that we will make a positive difference.

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