Introduction:
Life insurance is created in order to provide financial protection for a deceased individual’s family as they grieve. A lot of people wonder whether a claim on this policy can be disputed/rejected by the insurer. A short and simple answer to this is yes.
Misrepresentation
One of the common reasons as to why a claim can be disputed is due to misrepresentation. This can be an innocent, reckless or intentional lack of disclosure of correct information regarding health and lifestyle. An example of this includes an individual not disclosing that they have a heart condition due to excessive smoking.
What if the policyholder dies?
When a policyholder dies, the insurer will investigate the claim by reviewing autopsy reports and medical records. If the investigation cannot prove a lack of disclosure, then the beneficiaries are entitled to the death benefit. However, if a misrepresentation is uncovered that would have impacted the outcome the policy approval or premiums, then the insurer is entitled to deny the claim in its entirety.
Can a rejection be disputed?
The beneficiaries of a rejected policy will likely feel the insurers decision is inequitable and want to contest this. Firstly, beneficiaries would need to gather all documents regarding their policy from the original terms and documents to the rejection and submit a formal complaint to the insurer. If the insurer rejects the beneficiary’s complaint or they are unsatisfied with their response, they can escalate their complaint to an Ombudsman which is free of charge for them. If further escalation is required, beneficiaries should seek legal advice.
Can I invalidate my life insurance without realising?
There are a few different ways a policyholder can invalidate their insurance without realising. For example, your insurance may not cover some causes of death. If a policyholder dies while conducting criminal activities like reckless driving, this would be considered a high-risk activity and could invalidate your entire policy.
Conclusion:
To summarise, it is vital that policyholders remain truthful and honest when answering questions regarding their health and lifestyle to ensure their beneficiaries receive the correct benefit of their policy. If they are unsatisfied with the response from their insurer regarding their policy, they are well within their rights to detest and complain.
Summerfield Browne Solicitors can assist you with disputing a rejection to a life insurance claim.
