Reasons behind denied life insurance claims – and what to do if you are denied

by Team Dinks on June 2, 2013 · 0 comments

(This is a guest post)

With life insurance comes no small amount of small print, and in that small print are many reasons why you may not get the payout you expect. While a life insurance provider sets out policy small print to lay ground rules so you get what you need from the contract, there are also ground rules in there to make sure they don’t lose out either.

You can visit the Suncorp Life Protect website today to learn more about their current offerings.

Here are the most common reasons life insurance claims are denied – so you know how to avoid them:

Insufficient Documentation

Just as the insurer needs paperwork to create your life insurance policy, they also need paperwork to process a claim. This paperwork involves a claims form and an official copy of the death certificate. The death certificate provided by the funeral director usually won’t cut it – there needs to be a legal death certificate, or the claim may be denied.

Unpaid Premiums

Unpaid premiums lead to expired policies. An expired policy means no payout come claim time.

Material Misrepresentation

This basically means lying on an application – or misrepresenting the truth. If you are found to have lied to your insurance provider, your claim could be denied – even if the lie had nothing to do with the cause of death.

Common ‘misrepresentations’ include lying about age, employment (especially high risk professions), lifestyle habits (such as smoking or heavy alcohol use), dangerous hobbies, and medical history.

Fraud

If a life insurance provider investigates a claim and finds it to be fraudulent, the claim will be denied. Examples of life insurance fraud include, taking out a policy in someone else’s name without their permission, making up a false identity and then making a claim on that person’s “death”, and faking a death so beneficiaries can collect the payout.

Suicide

If someone commits suicide, the life insurance provider will not pay out on the claim. Sometimes life insurance providers will investigate to rule out suicide as the cause of death if the circumstances are suspicious. This will delay a claim.

Policy Exclusions

Some life insurance policies only offer limited cover, with only certain illnesses or conditions resulting in a payout. If the policy only covers accidental death, then death by illness or the treatment of an illness will not result in a payout. If the cause of death is excluded in the policy, there will not be a payout on the claim.

How to Dispute a Denied Life Insurance Claim

The first thing to do if you want to dispute life insurance claim is to find out as much information as you can. Read the small print of the policy in detail, and work out if you have been wrongfully denied. Next, you could make an appeal and deal with the insurance provider direct, or you could seek legal representation.



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