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It is common for life insurance companies to wrongfully deny a legitimate claim for benefits, or to otherwise interfere with the processing of a legitimate claim through an unreasonable delay. These actions can put serious pressure on the policyholder and/or their beneficiaries.
If a life insurance claim is denied, for example, you may be forced to appeal the denial through an internal administrative process, or, if that does not resolve the issue, to sue the insurer in a court of law. When grieving for a loved one, the prospect of an ongoing legal conflict may seem daunting.
At Raval Trial Law our life insurance attorneys are well-positioned to seek a favorable resolution to an insurance dispute, including those that involve life insurance. We understand that having a life insurance claim denied can be an overwhelming experience. After all, an unexpected claim denial can leave you and your family in a vulnerable financial position. We therefore work closely with our clients to ensure that they are fully aware of how their case is progressing.
Life insurance is rather simple. Though there are numerous different ways in which life insurance policies can be structured — policies can vary substantially with regard to their benefits, exclusionary clauses, underlying investments, and qualifying requirements — as a general rule, a life insurance policy pays out a lump-sum death benefit to the specified beneficiaries if the policyholder dies.
Life insurance policies will pay out no matter how the death was caused. As such, they provide very broad coverage in the event of death. Some exclusions may apply, however (Section 1101.055 of the Texas Insurance Code details the permissible exclusions), so it’s important to have a qualified attorney review your policy.
For example, a life insurance policy may have an exclusion that gives the insurer the right to deny benefits to the beneficiaries if, following a reasonable investigation, the insurer determines that the policyholder committed suicide.
Standard life insurance policies form a critical component of most long-term financial plans for couples and families. On the other hand, more specific sub-categories of life insurance, like AD&D coverage, are less common.
In Texas, as in many other states, life insurance companies have a limited time during which they have the right to contest life insurance claims. Texas law gives insurers two years from the date the policy goes into effect. This period is known as the “contestability” period.
What happens during the contestability period?
During this time, the insurer will be allowed to investigate your original application (in addition to your lifetime medical history) and determine whether you misrepresented any of the information on your life insurance application.
life insurance claim denied
If the insurer discovers that the application contains a mistake, or that you misrepresented some information in your application, then it will further investigate the situation to determine if the mistake/misrepresentation is relevant to the life insurance claim at-issue. If the life insurance claim would be affected, then it may deny the claim or reduce the death benefit. If only the premiums would have been affected, then the insurer may reduce the death benefit to account for the higher premiums.
After the contestability period passes, you need not worry about any mistakes or misrepresentations on the application. At that point, Texas law precludes the insurer from disputing coverage. Moreover, a mere mistake may not be enough to reduce or cancel coverage, as the insurer might have to prove fraud or intent.
The particular procedures required to challenge a claim denial vary depending on the type of life insurance policy that you have. If your life insurance is funded by your employer, you may have to adhere to the complicated administrative appeal procedures demanded by the federal Employee Retirement Insurance Security Act (ERISA). If you have an individual policy or a policy that is exempt from ERISA, then Texas state law will apply. This demands an entirely different set of procedures.
Here at Raval Trial Law, LLP, our attorneys have experience litigating insurance disputes in accordance with both Texas state law and federal ERISA regulations.
Depending on your insurance policy, you may have you pursue an administrative appeal with your insurer before you can file a lawsuit. With the aid of an experienced insurance attorney, you can pursue an administrative appeal with the insurer. If that fails, and negotiations fall through, then a lawsuit may be the most effective way to recover the benefits and other damages that you are owed.
When you consult with Raval Trial Law an experienced Houston trial lawyer at our firm will engage you in a collaborative partnership. We understand the unique challenges associated with insurance disputes, and how to navigate them successfully and in a manner that accomplishes our clients’ objectives. Our practical, results-oriented mindset drives every facet of our legal representation. We are laser-focused on working towards the best possible solution for each client.
