If you are the beneficiary of a life insurance policy, the benefits you receive could be a significant financial asset. They also represent the wishes of the insured regarding who they want to receive benefits.
If a claim has been denied or an insurance company is telling you they are investigating the matter for an unreasonably long period, you need the representation of our Pennsylvania life insurance claim denial attorney. If you are the named beneficiary on a life insurance policy that has been denied or if you believe that the insurance company is purposefully dragging the process out, our firm can help.
For a free case review, speak with our life insurance claim denial lawyers at The Reiff Law Firm today at (215) 709-6940.
Lawyer Handling Denials of Life Insurance Claims in Pennsylvania
Insurance providers employ experienced accountants, actuaries, and attorneys. They are charged with calculating the risk of any policy they issue and ensuring that they are not required to pay more than necessary. Denials of life insurance claims are profitable for insurance companies, and there is an assumption that beneficiaries will not pursue legal action.
If your claim is denied, the insurance provider will typically close the file. Because the insurer is not working for your best interests, they will not readily work with you in solving a dispute or negotiating a compromise. Our experienced Pennsylvania life insurance claim denial attorneys understand the frustration and have several legal strategies we can employ for dealing with insurance companies.
Life Insurance Claim Denials Under Federal and Pennsylvania Law
It is vital to have an experienced attorney working on your behalf if a life insurance claim is denied. The Pennsylvania and federal laws governing individual and group life insurance policies are complicated. If you do not understand the complexities of the controlling law, the chances of overturning a denial are drastically reduced.
Having our Pennsylvania life insurance attorney, who is well-versed in both Pennsylvania and federal law, working for you is vital when appealing a denied claim. Depending on the type of insurance policy that was denied, the governing law will be different. Individual policies are typically governed by Pennsylvania contract law, while group life insurance policies fall under the federal Employee Retirement Income Security Act (ERISA).
Common Reasons Life Insurance Claims Are Denied in Pennsylvania
Under many circumstances, a beneficiary will have no issues dealing with a life insurance company. When a policy has been in force for decades with regularly paid premiums, most insurance providers will pay the required benefits the insured envisioned. This is especially true if the deceased was elderly and died of natural causes.
However, life insurance companies make profits by collecting premium payments and not paying significant claims. If a policy is only a few years old, the value is substantial, or the cause of death is in question, a provider could reject the claim on any of the following grounds.
Mistakes or Misrepresentation
A common reason an insurance company will deny a claim is a mistake or a misrepresentation on the insurance application. The information you provide must be accurate – especially your medical history or unusual risk factors. Insurance companies often assume that mistakes are intentional lies and deny claims on those grounds. Our Pennsylvania life insurance attorneys are familiar with these allegations and understand that the majority of misrepresentations are justifiable errors, misunderstandings, or accidental omissions.
Contesting or Investigating a Claim
Every life insurance policy has a period of contestability included in its terms and provisions. Typically, the period is two years from the date the policy starts, but it can vary from policy to policy. Should a policyholder die during this early period, the insurance company is entitled to investigate to determine if misrepresentation or fraud occurred. It is not uncommon for an insurance provider to take advantage of this provision to deny an otherwise valid claim.
If a death is accidental, there could be some questions as to whether the policyholder took their own life. Suicide is a legitimate reason for denying a claim, but the burden of proof rests with the insurer.
Additionally, accidental death claims are often denied by insurance providers. An insurer will take the position that the death was not accidental if the insured’s negligence played a direct role in the death. Fighting these rejections is similar to fighting rejections based on claims of suicide; we will prove that someone else caused the accidental death.
Failure to Pay a Premium
If the insurance customer fails to pay the policy premiums, the life insurance coverage could lapse. If this occurs, the policy could be forfeited, prohibiting the beneficiaries from collecting any benefits. Typically, the lapse in payments must be significant, and a policy’s coverage should not lapse for a couple of missed payments.
Bad Faith
Fair dealing has always been deemed essential in the interactions between an insurance company and its insured. Additionally, insurance companies are obligated to deal with their insureds honestly and fairly and to always act in good faith.
The responsibility of acting in good faith stems from the insurer’s fiduciary role towards its insured in the insurance contract, which grants the insurer the right to manage and handle claims. Pennsylvania Legislature has established legal recourse for misconduct of bad faith by an insurance company towards its insured.
The court has the authority to issue various remedies if it determines that the insurer has acted in bad faith towards the insured. These remedies include awarding interest on the amount of the claim from the date it was made by the insured at a rate equal to the prime rate of interest plus 3%, awarding punitive damages against the insurer, and imposing court costs and attorney’s fees on the insurer.
The law does not provide a definition of bad faith, nor does it specify how the insured must prove it. However, the Pennsylvania Supreme Court has held that to prevail in a bad faith lawsuit, and the plaintiff must present clear and convincing evidence that the insurer lacked a reasonable basis for denying the policy benefits and knew or recklessly disregarded the lack of a reasonable basis.
Proof of an insurer’s self-interest or ill will is not necessary to prevail in a bad faith claim; however, such evidence is relevant to the second prong of the test.
There are many types of bad faith that can occur even without self-interest or ill will. For instance, bad faith can include poor claims handling, lack of attention, unresponsiveness, inadequate investigation, unreasonable denials, and more, which all fall under the statutory definition of bad faith without satisfying the self-interest/ill-will criteria.
Bad faith laws are aimed at rectifying instances of bad faith conduct by insurers, including bad faith practices during investigation, whether before, during, or after litigation. This conduct can encompass failure to investigate facts in good faith and failure to communicate with claimants. It is worth noting that a bad faith claim is not contingent on coverage being established.
Fighting a Denied Insurance Policy Claim in Pennsylvania
If you are having issues with a life insurance provider, the representation of our Pennsylvania life insurance claim denial attorney will be helpful. If your claim was denied, we will thoroughly review your policy terms and all correspondences and communications with the insurance company to help determine if the denial was inappropriate. Additionally, we will negotiate with the insurance provider to work towards a solution in your favor.
When claims are contested, the insurance company will have a team of lawyers working on their behalf. Our attorneys are prepared to fight for you and to take your case to court if negotiations fail to produce the result you desire.
Other Life Insurance Laws You Should Be Aware of in Pennsylvania
Pennsylvania has established life insurance laws to safeguard its consumers. While there are several rules that might apply to your specific case, we have provided a summary of the most important ones below. However, to fully understand how these laws might impact you, we recommend that you contact us for personalized guidance. Here are the key rules you should know in Pennsylvania:
Free-Look Period
Pennsylvanians who are considering purchasing a life insurance policy might take advantage of a valuable provision that is unique to their state. Specifically, individuals who decide to purchase life insurance in Pennsylvania are granted a 10-day period during which they can cancel the policy and receive a complete refund of any premiums that have been paid.
This provision provides an excellent opportunity for Pennsylvania residents to fully evaluate their coverage and make any necessary adjustments to their life insurance plan without fear of financial loss. By taking advantage of this option, Pennsylvanians can feel confident that they have made an informed decision about their life insurance needs and are well-protected for the future.
30-Day Grace Period
In Pennsylvania, life insurance policyholders are given a 30-day grace period to make late payments without worrying about their policy getting canceled or coverage denied. This provision ensures that policyholders are given ample time to make payments without the fear of losing their insurance benefits. It is a helpful safety net that provides peace of mind to policyholders who might have missed a payment deadline.
Timely Payment Must Be Made
When a claim for life insurance is submitted in Pennsylvania, the insurance provider must promptly pay the beneficiary the full amount without any undue delay. Generally, the payment is processed within a month after the provider receives the necessary documentation to establish the death of the insured.
Interest Penalty for Delayed Payments
In Pennsylvania, it is mandatory for insurance claims to be resolved promptly. The procedures involved might differ depending on the insurer, and the terms and conditions of your policy will often provide details on these procedures. In the event of delayed settlements, the insurance company will be required to pay interest on the amount owed.
Benefits are Guaranteed if the Insurer Loses Their Business
It is crucial to note that your current life insurance policy is always safeguarded by the Life & Health Insurance Guaranty Association of Pennsylvania. In the unlikely event that your insurance provider becomes insolvent, we will collaborate with the Guaranty Association to restore your policy. It is important to keep in mind that this guarantee is limited to a maximum of $300,000 for lost death benefits and $100,000 for lost cash surrender.
Call Our Pennsylvania Life Insurance Claim Denial Attorney for a Free Consultation
Contact The Reiff Law Firm at (215) 709-6940 for your free case assessment with our life insurance claim denial attorneys.
