When you file a life insurance claim, you expect financial security. Instead, many families face roadblocks. Insurance companies pay out billions each year, but they also deny or delay thousands of claims — often using technicalities buried in the fine print.
Here are the seven most common tactics insurers use and what they mean for you:
________________________________________
1. Misrepresentation on the Application Insurers comb through the policy application looking for errors. Even small omissions — like forgetting to mention a doctor’s visit — may be called a “material misrepresentation.” This is especially common in the first two years of coverage (the contestability period). Often, the alleged issue has nothing to do with the cause of death.
________________________________________
2. Endless Paperwork Requests Insurers frequently delay claims by demanding additional medical records, financial documents, or forms that seem irrelevant. Every new request stretches the process, leaving families in limbo when they need benefits most.
________________________________________
3. Saying the Policy Lapsed If a premium was missed, the company may argue the policy “lapsed” and no benefits are owed. But most policies have a grace period (usually around 30 days) and states often require proper notice. Sometimes coverage can even be reinstated.
________________________________________
4. Broad Use of Exclusions Policies contain exclusions — circumstances where benefits don’t apply. Examples:
• Suicide exclusions (usually limited to the first 2 years).
• AD&D exclusions (alcohol, drugs, or hazardous activities). Insurers often interpret these exclusions far more broadly than the policyholder ever expected.
________________________________________
5. Beneficiary Disputes If the beneficiary designation is outdated or unclear — for example, an ex-spouse is still listed — insurers may refuse to pay anyone until the courts resolve the dispute. This can delay benefits for months or even years.
________________________________________
6. Accusations of Fraud Some insurers allege fraud if they believe the insured provided false information. In reality, these claims are often based on honest mistakes. Accusations of fraud can intimidate families into giving up without a fight.
________________________________________
7. Bad Faith Delays Sometimes there’s no real reason at all — the company simply drags its feet. Calls go unanswered, files are “under review” indefinitely, and payments are stalled. This can rise to bad faith conduct, which may be actionable under state law.
________________________________________
What You Can Do If your claim has been delayed, denied, or disputed, know that you are not powerless.
Insurance companies count on families giving up, but you have legal rights. An experienced life insurance lawyer can:
• Review your denial letter and policy.
• Push back on unfair misrepresentation or exclusion claims.
• Hold insurers accountable for unreasonable delays or bad faith.
________________________________________
Bottom Line Your loved paid for life insurance to protect you. Don’t let an insurance company avoid its obligation.
