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Reasons for Denial of Life Insurance

Friday, July 31, 2009
Related Tags: policy | misrepresentation | insurance | health | life
 

Instructions

Restrictions

  • Step 1:
    Most states prevent a life insurer from denying coverage if a person named on a policy dies more than two years after the policy was issued. In most cases, an insurer will honor the policy providing the cause of death does not raise any red flags. If a cause of death seems suspicious in any way, an insurer will investigate the claim on the policy to determine if the policy's benefits should be paid.

Misrepresentation

  • Step 1:
    One of the reasons an insurer can deny coverage when a claim is made for life insurance benefits is to look for a material misrepresentation that was made on the policy. A material misrepresentation is any fact about an insured's health or concealment of any information that has not been included on the application for insurance. This type of misrepresentation means that facts have been omitted that, if known, would have kept an insurer from issuing a policy.

Contact the Insurer

  • Step 1:
    When a policy is denied, the first step is to contact the insurer to determine why it denied the application for the policy. An insurer is required by law to provide a specific reason why an application for life insurance was denied. The information from the insurer can be sent to the individual or to his doctor. The results from the insurer need to be reviewed to see if there was an error which caused the denial of the application.

False Positive

  • Step 1:
    Many life insurance policies require an insured to undergo a medical or health exam to provide evidence of insurability for a policy. It is possible that any blood work that was done could show a false positive or an abnormal result for some kind of health condition. An additional test should be performed to verify that there are no health issues.

Insurability

  • Step 1:
    Insurers will not provide a life insurance policy to individuals who are deemed to be uninsurable. This can be because of health issues, professions or activities that are too risky to insure. Some insurers have various types of policies that can be purchased that do not require insurability such as simplified issue policies. An insurer may also provide coverage for certain health issues provided that an insured is keeping the condition under control.

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