People take out life insurance policies so that their loved ones will be protected in the event of an untimely death. But far too often, these beneficiaries get denied when they file a claim with the life insurance company that issued the policy. The bad faith insurance lawyers at Staver Accident Injury Lawyers, P.C. are here to defend the rights of beneficiaries when life insurance companies wrongly withhold compensation.
There are three common reasons why life insurance or accidental death and dismemberment policy might get denied: the death was not accidental, the policyholder made a material misrepresentation, or the policy was not in force at the time of death.
Contact Staver Accident Injury Lawyers, P.C. today at (312) 236-2900 for a free, no-risk consultation.
Life Insurance VS. Accident Death and Dismemberment (AD&D)
Life insurance and accidental death and dismemberment (AD&D) insurance are often lumped together, although they are subtly different. Often times, AD&D insurance supplements a life insurance policy. Other times, someone will purchase AD&D insurance while mistakenly believing he or she is purchasing life insurance.
The main difference between the two is that to recover a benefit from an AD&D insurance policy, the claimant must show that the policyholder died an accidental death or experienced an accidental dismemberment as defined within the policy agreement.
Sometimes, the insurance agreement includes a clause specifying that compensation will be denied if the policyholder dies or gets dismembered as the result of intoxication. So if your loved one perishes or gets maimed in a car crash, and it emerges from the toxicology report that he or she had alcohol or drugs in the blood at the time of the accident, the insurance company might try to deny you benefits.
But there is a difference between being intoxicated and having alcohol or drugs in one’s blood. An attorney may be able to gather evidence to support a version of events where the alleged intoxication was not the primary cause of death or dismemberment.
Alternatively, the insurance company might try to claim that an intervening factor caused the death of your loved one. For example, during an operation to address injuries resulting from an accident, your loved one may experience a stroke that takes his or her life. In this case too, a skilled attorney can gather the evidence to show that the stroke would not have occurred but for the accident.
The Policyholder Made a Material Misrepresentation
When you file a claim to recover on a loved one’s life insurance policy, the insurance company will scrutinize the initial policy application. If they find any discrepancies between the information you put in the claim and the information your loved one put in the application, the insurance company may try to deny your claim.
According to the law, however, these misstatements or omissions must be material. This means that the insurance company must demonstrate that they would have made a different decision regarding the coverage of your loved one had he or she put the correct information in the application.
For example, if your loved one misstated his or her height in the application, this would not be a sufficient basis for the insurance company to deny benefits. But if the misstatement concerned your loved one’s dangerous occupation, medical condition, or enjoyment of extreme sports, a court may consider the misstatement to be material.
The Policy Was Not in Force at the Time of Death
The insurance company may try to deny the life insurance claim by arguing that the policy was no longer in force at the time of the policyholder’s death. In general, an insurance policy will expire upon the policyholder’s failure to pay the premium, voiding all coverage from that point onwards.
But the Illinois Insurance Code mandates that a life insurance company provide notice of the end of coverage, and then offer a grace period of at least 30 days during which the policyholder (or his or her estate) might make up for the late payments. Only after the grace period is over can the insurance company claim that the policy was no longer in force at the time of death.
How a Life Insurance Attorney Can Get the Compensation You Deserve
Insurance companies like to sell themselves as looking after the interests of their policyholders, and while this may be true sometimes, what always matters most to them are their profits—just like any other business. This means that if the insurance company can make an argument that it can deny your claim, it will attempt to do so. In response, it’s up to you to put up a fight and get the compensation you deserve.
A skilled Illinois insurance attorney can help you do just that. It can be stressful and emotionally challenging to fight an insurance company while mourning the passing of a family member. At Staver Accident Injury Lawyers, P.C., we pride ourselves in not only getting good results on behalf of our clients but also making the process of getting compensation as hassle-free as possible.
For example, we don’t take fees until we win or settle your case and always make ourselves available to address the concerns and questions of our clients. If you think an insurance company is wrongly denying a life or AD&D insurance claim, you can contact us today for a free consultation at (312) 236-2900.
