While some people have purchased a life insurance policy on their own, most individuals have coverage in the event of death under a plan established by their employer. Most employer-provided benefit plans which include life insurance, are governed by ERISA (Employee Retirement Income Security Act). While every claim for life insurance benefits should be handled carefully, the impact of the applicability of ERISA should not be taken lightly. Most people are surprised when an unfortunate death of a family member occurs and the insurance company denies the life insurance claim, even though the policy was clearly in force. Keep in mind that like any business, an insurance company has a goal to generate profits. Denying a life insurance claim is one way to increase those profit margins.
When a claim for life insurance is received, and despite what you may be told, the insurance company performs an investigation primarily intent on figuring out a way not to pay the claim. Life insurance claims can be denied for a number of reasons. The most common bases for denial include suicide, improper use of prescription or illegal medication, inappropriate or illegal conduct or the individual’s misrepresentation of their medical condition. We have also dealt with issues as to the proper beneficiary designation or even allegations where the beneficiary of the life insurance policy is claimed to have caused the death of the insured.
If you have life insurance through your employer, and you are terminated for whatever reason, you may have the right to convert that life insurance policy to an individual policy. The full premium cost will become your responsibility but at least coverage can continue uninterrupted. This can be extremely important to individuals who would otherwise be uninsurable due to a pre-existing condition. There will be time limits that apply. An insured under a life insurance policy should check the language of the policy itself and exercise these conversion rights if desired.
For a no cost review of a life insurance claim denial, please feel to contact the Law Office of Shawn E. McDermott, LLC by completing our online contact form or calling our office at (303) 964-1800. Although our office is located in Denver, Colorado, we can likely assist you regardless of your location within the state of Colorado or any other state.