Life Insurance and Insurance Bad Faith

Obtaining life insurance is a commonly used method to provide financial security to loved ones and/or business partners after someone passes away. It provides peace of mind and can help replace lost income, pay off debts/mortgages, or pay for probate and estate administration costs and fees.

When an individual applies for a life insurance policy, they complete an application and answer questions related to their medical history, family information, and personal habits. The answers to these questions may affect the premium of the insured and whether the insurance company will ultimately contest the payment of benefits.

If an individual or an agent misrepresents something on their application, whether affirmatively or by omission, the insurance company (which is always looking to avoid paying benefits) could attempt to invalidate the policy and deny coverage. A denial can also occur after the policy holder has already passed away – leaving the beneficiaries with few options.

Some of the most common reasons life insurance companies deny claims include:

• Material misrepresentation on the application
• Failing to disclose pertinent information during the application process
• Policy lapsing because of non-payment of premiums
• Beneficiary not named on the policy
• Policyholder’s death caused by an illness that is not covered
• Illegal or dangerous activities
• Generally speaking, in California, life insurance companies have a set amount of time to deny a claim.

This is commonly referred to the “contestability period.” If your claim was denied during this period, it does not mean all hope is lost. If your claim was denied, our attorneys are here to help.

Contact our law firm today for an insurance claim case evaluation.