Death is inevitable. However, some people are not comfortable discussing it, so the idea of buying a life insurance policy is a topic that’s usually avoided. Some people fail to consider that when death comes, those that will be left behind would need to fend for themselves. It is only practical that you consider how your loved ones will live once you pass away.
In many cases, insurers will not honor their end of the bargain, citing so many convoluted reasons to ignore their responsibility. It’s bad enough that you’re grieving for the passing of a loved one. What’s worse is you’re being scammed by your insurance company. In major cities like Los Angeles, a life insurance attorney can help make your claims process faster.
How life insurance works
The concept is simple. There are four key players: the insurer (insurance company), the owner of the policy (contract), the insured, and the beneficiary. In some cases, the owner and the insured are the same. The payment schemes are quite simple as well. The insurance company charges the owner a premium for a certain number of years, depending on the type of life insurance policy that is bought.
In return, if the owner of the insured dies, the insurer will pay an agreed amount to the beneficiary. This is where it is not simple anymore.
Filing a claim
Upon the death of the insured, the beneficiary will file an insurance claim. To do this, they must submit the proper documents and everything related to the death of the insured. These include a toxicology report, a coroner’s report, an autopsy report, a medical examiner’s report, and a police report. A claims examiner will look at this and may request additional documents.
The three outcomes
Paid. If you get paid, then that’s good. All you have to worry about is whether to get the money in a lump sum or the funds will be deposited into an account.
Delayed. Not necessarily denied, delayed claims may still take years to be honored. Insurance companies may delay the claims even if all the pertinent documentations have been submitted.
Denied. If your claim is denied, it is not final, even if you’re insurer has convinced you of it. Insurance companies cite a variety of reasons that may not be legitimate but have the intended effect that you’ve been denied for a valid reason. They may send you a letter written by a claim examiner saying that based on policy provisions and exclusions, your claim is being denied. If you are convinced, then your loved one’s money will go to waste. This is the best time to call a life insurance attorney.
Some of the reasons life insurance may be denied include:
- material misrepresentations on the policy wherein the insurer contests the claim based on a technicality, however small and insignificant it may be;
- failure to pay the premium, easily the best reason for insurers to deny a claim; and
- policy exclusions, where the contract states the instances of exclusions
These are just some of the maneuverings that some insurers use in order to avoid paying the surviving family members of the insured. But you as the beneficiary should know that this is not the end of the battle. There are ways to go around it.
Ideally, you should consult a lawyer before signing the contract of a life insurance policy. That way, you can fully understand what you are paying for and what you will get in return. While some insurance companies will honor your agreement, there may be instances where they won’t. A lawyer can help your loved ones get what they deserve.