Life Insurance Death Benefit Claims
Life insurance policies are typically purchased to provide financial security and protection to surviving family and loved ones in the event of death. Among other things, it may provide a death benefit to survivors after a loved one dies. The person insured pays a premium based on the insurance company's promise that it will pay a particular amount to a beneficiary upon the insured's death. Often, these proceeds are necessary for surviving family members after a breadwinner's death. Unfortunately, some insurers deny legitimate claims, and it may be important to obtain legal counsel and representation from an injury attorney. To make sure that you fully assert your right to compensation, you should consult the Detroit life insurance lawyers at Feldheim & Wilenkin.Bringing a Life Insurance Death Benefit Claim
There are two main types of life insurance policies in Michigan: term and permanent. Generally, term life insurance provides coverage for a particular number of years and pays a death benefit. Insurance policies that build in cash value over a lifetime and pay a death benefit are also available.
Once your life insurance death benefit claim is filed, your insurer is required to pay you promptly. This usually means payment within a month of receiving proof of death. Insurers are supposed to pay accrued interest on the proceeds of the policy when they take more than 60 days to settle a claim. They may face steep penalties for a failure to settle claims in a prompt, fair, and equitable way. Among other things, you may be able to bring a lawsuit against the insurer for a breach of the insurance contract.
Life insurance, like other insurance policies, is a contract between an insured person and the insurance company. Typically, there are exclusions to coverage spelled out within the policy. In order to protect profits, insurers often refuse to pay death benefits while citing an exclusion that may or may not apply. An adjustor may try to twist what happened to your loved one to fit it into an exclusion that would allow it to deny you a death benefit. For example, they might claim that the death was an intentional suicide and try to require you to prove otherwise. They might investigate and argue that the death was caused by a risky activity like parachuting, which was excluded. In many cases, the exclusion may not apply, and the denial may be a breach of contract.
Each policy and factual situation is different. If the policy language is clear, the court must enforce it as it was written. However, in some cases, the language may be ambiguous. Ambiguous provisions of a policy—those that may be read with different meanings—will be interpreted in the way that is most favorable to you. If you are dealing with a denial of your claim, it is important to retain an attorney who is familiar with insurance policies and their complexities. An experienced insurance attorney can read your policy and determine which arguments to make to pursue a death benefit.
In Michigan, insurers are authorized to contest a death benefit if an applicant materially misrepresented their underlying health when completing the application for the policy. For example, an insurer may contest a death benefit if the insured claimed that he was not a smoker when he was. In order to void the policy for an applicant's misrepresentation, the insurer will need to establish that the applicant made a false representation and that they knew or should have known that this representation was false.
However, an insurer may only rescind (void) a policy during the two-year period after the application was submitted. When an insurance company waits until the insured passes away before investigating whether there were misrepresentations in the application, and it then tries to deny coverage, this practice is known as "postclaim underwriting."
When someone dies within the two-year contestability period, insurers will search their lifestyle and medical history, looking for a basis to rescind the policy. There need not be a causal relationship between the supposed misrepresentation and your loved one's cause of death to void a life insurance policy.Contact a Knowledgeable Life Insurance Lawyer in Detroit
When a loved one dies, the last thing that you should need to handle is arguing over an insurance company's denial of your death benefit claim. Life insurance claims should be paid promptly. The Detroit life insurance attorneys at Feldheim & Wilenkin represent claimants against insurers across Southeast Michigan, including in Wayne, Oakland, and Macomb Counties. Call us at 248-737-0700 or contact us through our online form for a free appointment with a life insurance or fire loss attorney.