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Can You Sue a Life Insurance Company?

You don’t often think about suing a life insurance company. It’s a simple relationship:  the policyholder pays premiums and then dies; someone collects the proceeds. Except, sometimes they don’t. If you believe you are the victim of a bad faith claim denial, contact an Illinois life insurance claims attorney today. 

Suit Based on Denied Claim

The basic contract underlying a life insurance policy is that the person who buys the policy will make premium payments in anticipation of a future benefit. When that purchaser dies, the insurance company will pay the policy’s proceeds to the designated beneficiaries of the policy. The insurance company hopes the buyer will live forever while the buyer’s best return on the money is to die the day the policy is purchased. In either case, the insurance company’s good faith obligation is to promptly pay the policy’s proceeds to the beneficiaries. 

The insurance company does have to be sure that it is making payment based on a death that qualifies under the policy terms and that it is paying to the correct parties. The verification of these obligations can take some time. But the company must act in good faith. If it chooses to deny or delay a payment, it must have legitimate reasons and be able to explain those reasons to those awaiting their proceeds. 

Some of the good-faith reasons for denying or delaying a claim include:

  • Exclusions stated in the original policy
  • Misrepresentation by the purchaser at the time of purchase
  • Failure to pay premiums

But insurance companies don’t always make good faith denials. 

Acting in Bad Faith

All insurance companies are required to act in good faith toward insured parties and their beneficiaries. They must pay claims or deny them based solely on good faith belief in a legitimate basis for the denial. A bad faith denial includes, essentially, the insurer’s refusal to pay your claim without a reasonable basis or its failure to conduct a timely and proper investigation of your claim. 

In addition to the kinds of legitimate denials discussed above, insurance companies will sometimes deny benefits for reasons that are less likely to demonstrate good faith conduct. If you were denied for these usually bad faith reasons, a life insurance claims attorney in Illinois can help you in working to receive your proper benefits.

  • Incorrect or unfair determination of the cause of death
  • Failure to properly evaluate the claim
  • Failure to pay the full or correct amount
  • Claim that policy provided less or different coverage than originally agreed
  • Denial of some or all benefits in hopes that beneficiary will not dispute the payment
  • Misrepresentation of the policy terms or conditions
  • Nondisclosure of exclusions or policy provisions

Let an Illinois Life Insurance Claim Attorney near Chicago Help You

If you or a loved one has been a victim of a bad faith life insurance claim denial, an Illinois life insurance claims attorney can help you recover the proceeds to which you may be entitled. Illinois law requires that insurance companies pay claims in good faith. Let Bartolic Law help you recover your benefits – contact us today. 

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