Denied Life Insurance Claim Overturned
Contestable life insurance claims are common and there are ways to navigate through an insurer's investigation process and get the claim paid. Here we discuss how we forced an insurer to pay a denied claim and improve their application in the process.
In 2007 our client submitted a death claim to the HSBC life insurance claims department. Sadly, his mother had recently passed away after suffering from medical complications. The death claim was reviewed and quickly denied. According to HSBC ‘material health information was not disclosed on the online application’. HSBC specifically stated in their denial letter that they had asked the question, “Have you ever had a Stroke?” and that the insured answered “No”. Both of these facts were true.
As is standard practice for all contestable life insurance claims, the insured’s medical records were reviewed by HSBC’s claims department. What they claimed to be in the medical records were doctor’s notes that the insured had suffered “mini strokes” – medically referred to as a TIA (Transient Ischemic Attack).
Our client contacted us because he believed he and his mother had answered the application honestly and disclosed everything about her medical condition. We immediately opened our investigation into the facts. Very quickly we found several things that contradicted HSBS’s claim denial;
1- The application specifically asked about Strokes, but made no mention of TIAs.
2- The medical records did not state that any Stroke had occurred. Neither did the records state that any TIA had occurred. What the records did state was that TIAs were suspected.
We then went deeper in our efforts to build a solid case for reversing the denial. First we obtained a letter from the attending physician that stated the insured never had a stroke nor TIA. Then we went to the American Heart Association and obtained a statement that ‘a stroke is not a TIA, and a TIA is not a stroke — the two events are distinctly separate’.
Believing we had now gathered enough irrefutable evidence for HSBC to make an easy decision to approve the death claim, we presented all of our information with a request for a reversal of their denial.
Over the next 24 months HSBC delayed, delayed and further delayed their decision. The Claim Underwriter refused to take or return phone calls. The Customer Disputes Representative would leave general messages for us at 3am – so not to have to speak to anyone. The Customer Service Department continually told us to “call back in 14 business days”. Almost no written correspondence was ever sent by HSBC informing us of the status of the claim.
What we knew to be true was that HSBC was wrong in their denial and our client was owed the death claim money. What we didn’t know was that HSBC’s life insurance claims department has no regard for their customers or dealing with claimants fairly. Finally, by leveraging some executive level relationships, 2 years and 9 months after her death, the claim was finally paid. Our client received a check for $250,000.00 — with a statement referencing the claim information and an incorrect customer service telephone number in the event of any questions.
As a final note, during this claim dispute, HSBC rewrote their life insurance application. The question now asks ‘Have you ever had a Stroke or TIA?’
Steve C. Burgess has directly helped his clients collect more than $60 million of life insurance death claims that were disputed or denied.
Copyright Steve C. Burgess
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.For specific technical or legal advice on the information provided and related topics, please contact the author.