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What to Do after a Life Insurance Claim Is Denied

Life insurance is an important financial tool that helps to ensure those who depend upon you will be taken care of when you’re gone. The peace of mind that you derive from life insurance can be difficult to overstate. If, however, you’ve filed a life insurance claim that was denied, it represents the flip side of this coin – you were chosen as a beneficiary of the holder’s policy, but his or her wishes were not upheld (and the claim was denied). 

There are strict laws in place to help claimants like you who are facing life insurance claim denials, and one of the first steps you should take in the face of a denied life insurance claim is consulting with an experienced Illinois life insurance attorney.

Denial Based on Material Misrepresentation

Insurance companies can deny life insurance claims for alleged material misrepresentations, which means that the policyholder is alleged to have provided false information, such as the following, on the application:

  • The policyholder’s age 
  • The health history of the policyholder
  • Identifying information relevant to the policyholder

Material misrepresentation claims, however, are only valid for the first two years that the policy is in place. After that, the insurance company needs another reason for denying your claim. 

In the State of Illinois

The Illinois Insurance Code regulates the state’s insurance industry – as guided by the Illinois Department of Insurance (IDOI), and the primary rules that may affect your claim include the following:

  • The payment grace period – While policyholders are required to keep up with paying their premiums, they are also guaranteed a reasonable grace period, which in Illinois is 30 days. If this grace period is in effect, the claim cannot be denied for nonpayment. 
  • The incontestability Clause – If the premiums for the policy upon which you made your claim were kept up for at least two years, it cannot be denied for any inaccuracies made by the policyholder (as discussed in the material misrepresentation above). 
  • Timely Payment on Claims – When you file your life insurance claim, the life insurance company is required to address the matter promptly, and failure to do so can lead to serious penalties that can include paying interest on the proceeds after more than 30 days have passed since filing. 

The insurance company handling your claim has immense resources behind it, which makes working closely with a dedicated life insurance attorney the surest path forward. 

An Illinois Life Insurance Attorney Is on your Side and Standing by to Help

If you have a life insurance claim, it represents the care and concern that your lost loved one set up for your financial benefit, and having it denied can leave you at a considerable loss. Fortunately, you have legal rights, and the trusted Illinois life insurance attorneys at Bartolic Law are here to help protect them. For more information about what we can do, please don’t hesitate to contact us today.

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