Guidance for Collecting Life Insurance Death Claims
This article provides real life guidance on how to prepare for submitting a life insurance death claim and examples of what can cause a claim to be denied. Use these tips to ensure you will receive your life insurance death claim with as little hassel as possible.
When an insured dies there is not a standard process of submitting a claim to the insurance company and then automatically receiving the death benefit. In our twenty-plus years of helping clients collect death benefits, no two claims have been the same. An unfortunate reality is that insurance companies look for reasons to deny death benefit claims during the contestability period. While there are instances when a claim should be denied because of fraud, there are also situations when death benefit claims are denied for the wrong reasons.
We represented a client where the initial death claim was denied because the insured paid the premium from savings while waiting for a consulting contract bonus to pay. The insurer claimed he did not have enough earned income for them to issue a policy and were therefore not liable to pay the claim. In another case we collected a death benefit claim for a client where the claim was initially denied because there was no named beneficiary. This, even though she lived with her disabled mother and had no husband or children and the intent was obvious. We collected a death benefit claim for a client where the initial claim was denied because the autopsy report was misread by the claim underwriter who accused the insured of being a drug abuser. We collected statements from his doctor disputing this accusation and got the claim paid.
These are just some examples of why you need to carefully prepare your life insurance death benefit claim before you submit it. Read through the policy to determine if there could be any restrictions or stipulations for receiving the death benefit. Check the date of the application. Is it the same as the policy issue date? All benefits start as of the date the policy was issued. If the insured died within two years of the policy date, the insurance company will almost certainly challenge the death claim. All life insurance policies can be challenged, or contested, by the insurer in the first 2 years. Review the death certificate for the stated cause of death. If you are submitting a claim under an accidental death policy, the cause of death will be extremely important to collecting your claim. Be prepared with documentation.
The insurance company will do several things when they receive a claim. One of the first things they will do is ask the beneficiary to meet with a claims underwriter for an interview. At this meeting you will be asked about the insured’s medical history, work history, personal life and cause of death. These people are not there to help you; they are there to uncover anything that may have been hidden from their client – the insurer. Don’t have the meeting alone. Bring a trusted family member, friend or advisor. The insurer will do a medical investigation in which they will review autopsy reports, toxicology reports and records from doctors the insured visited. This part of the investigation may go back a few years or several decades. One of our cases required records that went back over twenty years. There will be a financial investigation which can include examining tax returns, social security records and financial aid applications. We helped a client who had several Limited Partnership interests which the insurance company valued at a fraction of the actual value. We had to collect independent appraisals in order to prove the deceased’s net worth.
If you are going to submit a death claim be as prepared as possible. Remember that insurance companies are looking for reasons to deny claims. Document interviews and conversations in case you need to go back to the items discussed. If possible have someone with you during meetings. If the insurance company records conversations keep a record of the time and date. If your claim is denied you must be notified, in writing, as to the reason why. From this information you can appeal the denial, but it’s always easier to be prepared for the initial claim and collect the death benefit that the insured intended you to have.
Steve C. Burgess has directly helped his clients collect more than $35 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.