Many employer-sponsored benefit plans include accidental death and dismemberment (AD&D) coverage alongside life insurance. AD&D claims involve distinct legal issues, including disputes over whether a death qualifies as “accidental” under the policy. DeBofsky Law represents beneficiaries in both life insurance and accidental death claims. For more information about AD&D coverage, policy exclusions, and how to challenge a denied accidental death claim, visit our Accidental Death and Dismemberment page.
How to Challenge a Life Insurance Denial?
Life insurance is an important component of financial planning in order to make sure that survivors receive adequate financial support. While no one envisions issues arising with payment of benefits when someone who has life insurance dies, as the discussion above shows, there are many potential issues and pitfalls that can arise. Enlisting the services of a knowledgeable and experienced lawyer at the first sign of a problem is crucial in order to avoid an unanticipated loss of expected life insurance coverage.
Why Choose DeBofsky Law for Your Life Insurance Claims?
When you enlist the help of DeBofsky Law, you get a team with more than 65+ years of experience advocating and watching out for you during a difficult time. Our litigators are authorities in:
- Assistance and advice in properly filing life insurance claims
- Evaluating questionable life insurance company denials
- Assessing employer miscommunications or failure to provide necessary advice about coverage
- Close examination and analysis of your insurance policy and all applicable revisions
- Preparing your claim and guiding you through the claim appeals process
- Filing a lawsuit and handling all aspects of litigation if your appeal is unsuccessful
- Taking your case to the court of appeals if warranted
Know Your Rights
Denials could happen for a variety of reasons. An insurance company may challenge your claim even if you can produce a life insurance policy and a death certificate.
Our team has the experience to disprove their claim denials and get you the relief you need.
Does This Apply to You?
Contact DeBofsky Law for an attorney consultation. We will work with you to figure out your problem, and how we can help.
Fees for Life Insurance Claim Representation
If your life insurance claim has been denied, you may have questions about the cost of legal help. We offer various fee arrangements depending on the needs of your case, which are discussed openly during your first conversation. Learn more about our fee arrangements for employee benefit claims.
Life Insurance Claims Are Complex. Let Us Be Your Guide.
If your life insurance claim is denied, you may not realize you can appeal prior to going to court. Indeed, if your benefits are subject to the ERISA statute, you must appeal prior to filing suit or your case may be dismissed.
Life insurance claims can be exceedingly complex. Count on our more than 60 years of combined experience and our record of success in helping you get the benefits you deserve.
Once we accept your case for representation, we will effectively present your case and guide you every step of the way. We do not stop until you get a fair hearing.
Common Reasons for Life Insurance Claim Denials
There are a variety of reasons why life insurance claims may be denied even if you can produce a life insurance policy and a death certificate.
Evidence of Insurability
Employees are generally given the opportunity to enroll in employer-sponsored group life insurance when they begin work or when the benefit is initially offered. If, however, they wish to later change coverage, or if they initially declined the employer’s group life insurance and later try to enroll, the employee is required to submit evidence of insurability (EOI). The EOI process typically requires completion of an application asking questions about the employee’s medical history; the insurance company may also request medical records or an independent medical examination. If the insurance company determines that the employee does not satisfy its underwriting requirements, it can deny coverage.
Beneficiary Designations
Life insurance policy holders have unfettered discretion about changing beneficiaries. And a change in beneficiaries may occur up to the moment of death, although a late change in beneficiaries may trigger an assertion that the newly named beneficiary unduly influenced the deceased to change the beneficiary designation. It is also critical that the rules for changing beneficiaries be strictly followed, particularly for employer-sponsored group life insurance. The failure to submit a beneficiary designation to the benefit plan’s administrator may void that designation and result in an unintended beneficiary receiving the insurance proceeds.
If the life insurance company is unsure of the beneficiary and there are competing claims to the life insurance, the insurance company may file a legal action known as an “interpleader” which names the competing beneficiaries and allows them to press their claims to the life insurance indemnity before a court.
While there are some circumstances where it can be shown that a policyholder substantially complied with the procedures for naming a beneficiary, successful challenges are rare, and courts almost always find that the party identified in the most recent beneficiary designation that was submitted to the insurance company or the employer’s benefit plan administrator has the best claim to the proceeds.
Contestability
Newly issued life insurance is subject to “contestability” within two years of the issuance of the policy. This means that the insurance company has the right to scrutinize the application for coverage; and if there were misstatements in the applicable, the coverage can be rescinded. Examples are omission of past medical treatment, failure to disclose other coverage, or even a misstatement about an occupation. Suicide which occurs within two years of applying for coverage is also generally excluded, but after two years may be covered.
Lapse
The failure to pay premiums can lead to a lapse in insurance coverage, which means that no benefits would be payable. However, most states have laws that protect insureds against improper lapses in coverage or which extend the period of time beyond the premium due date when payments may be made. This issue can be especially important with older policyholders who may be suffering from Alzheimer’s disease or other forms of dementia that cause them to neglect making premium payments.
Conversion/Portability
When an employee who has group insurance through work leaves employment, they may have the right to take their life insurance with them by paying the full amount of the premiums for the coverage. Employees who stop working due to a terminal illness must be provided notification and the right to continue their life insurance. An employer’s failure to properly advise the employee can lead to employer liability.
Note on Accidental Death:
Even if a death is sudden and unexpected, it may not be considered “accidental” by the insurance company. Death due to health conditions or during the course of medical treatment may not be covered. Drug or alcohol related deaths may be challenged, and even car accident deaths resulting from speeding or reckless driving may be challenged.
Filing a Life Insurance Claim
Required Documents for Your Life Insurance
Filing a life insurance claim typically requires submitting a certified death certificate, the completed claim form provided by the insurance company, and a copy of the policy or group certificate. For employer-sponsored plans, the employer’s human resources or benefits department should be able to provide the necessary forms and information about the policy. If you are unable to locate the policy, the insurer is required to process the claim based on its own records of coverage.
Life Insurance Claim Timeline
After submitting a claim, the insurance company typically has 30 to 60 days to evaluate and pay the claim, depending on state law and whether the policy is governed by ERISA. Delays beyond this period may indicate that the insurer is looking for reasons to deny the claim. If the insurer fails to act within the required timeframe, beneficiaries may have additional legal remedies available to them.
Filing Group Life Insurance Claims Through Your Employer
If the deceased was covered under an employer-sponsored group life insurance plan, the claim is typically initiated through the employer’s human resources department. The employer is responsible for providing the claim forms and notifying the insurance carrier. In some cases, the employer’s failure to properly administer the plan or notify the beneficiary can itself give rise to a legal claim.
What If the Insurer Requests More Information?
Insurers may request additional documentation such as medical records, autopsy reports, or police reports. While cooperating with reasonable requests is advisable, beneficiaries should be cautious about providing statements or authorizations without understanding how the information may be used. An attorney can help you respond to insurer requests strategically and avoid common pitfalls.
ERISA vs. Non-ERISA Life Insurance Claims
What Are ERISA Life Insurance Policies?
Most life insurance provided through a private-sector employer is governed by the Employee Retirement Income Security Act (ERISA). ERISA policies are subject to federal law, which means that claims and appeals follow specific procedures set out in the statute and federal regulations. Beneficiaries must exhaust the plan’s internal appeals process before filing a lawsuit, and the case will be heard in federal court.
Damage Limitations Under ERISA
Under ERISA, the remedies available to beneficiaries are limited. A successful claimant can recover the benefits due under the plan, along with attorney’s fees and costs at the court’s discretion under 29 U.S.C. § 1132(g). However, ERISA does not allow for consequential or punitive damages. This is one of the most significant differences between ERISA and non-ERISA claims and underscores the importance of building a strong administrative record during the appeals process.
Non-ERISA Life Insurance Policies
Individual life insurance policies purchased through a broker or agent, as well as policies provided by government and religious employers, are generally not subject to ERISA. These claims are governed by state contract and insurance law, which may provide broader remedies including consequential damages and, in some states, bad faith damages and punitive damages. Non-ERISA claims are typically filed in state court.
Why This Distinction Matters
Whether your life insurance policy falls under ERISA or state law determines the procedural requirements, the court in which your case will be heard, and the damages available if you prevail. Identifying the correct legal framework early in the process is essential to preserving your rights and pursuing the most effective strategy.
The Incontestability Clause
How the Incontestability Clause Protects You
Most life insurance policies contain an incontestability clause that limits the insurer’s ability to rescind coverage after a specified period, typically two years from the date the policy was issued. Once the contestability period expires, the insurer generally cannot deny a claim based on misrepresentations or omissions in the original application, even if the insured failed to disclose a material medical condition.
The Two-Year Contestability Period
During the first two years after a policy is issued, the insurance company has the right to investigate the application and rescind coverage if it discovers material misrepresentations. This is the period of greatest risk for beneficiaries, as the insurer may conduct a thorough review of the insured’s medical history and other application information.
What Makes a Misrepresentation “Material”?
A misrepresentation is considered material if the insurer would not have issued the policy, or would have issued it on different terms, had it known the true facts. Courts apply different standards in evaluating materiality, with some jurisdictions requiring the insurer to prove that the misrepresentation actually increased the risk of loss, while others focus solely on whether the information would have affected the insurer’s underwriting decision.
Fraud Exception to the Incontestability Clause
In some jurisdictions, the incontestability clause does not protect against claims of outright fraud, as distinguished from innocent misrepresentation. This exception is narrowly construed, and the insurer bears the burden of proving that the insured intentionally deceived the insurer with knowledge that the information was false and with intent to induce the insurer to issue the policy.
Appealing a Denied Life Insurance Claim
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Recent Victories in Retirement Benefits
See how DeBofsky Law has protected clients’ pension and 401(k) rights in court.
Retirement Benefits | ERISA
Skowronski v. Briggs
DeBofsky Law won a dismissal in favor of a civil union partner who was sued by her late partner’s adult children over IBM 401(k) benefits. The court confirmed that under the Illinois Civil Union Act and the IBM Plan’s own terms, a civil union partner qualifies as a surviving spouse entitled to full ERISA retirement benefit protections.
Accidental Death
Prather v. Sun Life
On December 13, 2016, the U.S. Court of Appeals for the Seventh Circuit issued a ruling in the case of Prather v. Sun Life & Health Ins. Co. (U.S.), 843 F.3d 733 (7th Cir. 2016). The case, which involved a claim for accidental death insurance benefits, overturned a lower court ruling denying Lee Ann Prather’s claim and ordered Sun Life to pay the full amount.
Fibromyalgia
Cathleen Kennedy v. Eli Lilly & Co.
DeBofsky Law, along with Bridget O’Ryan and O’Ryan Law Offices, won a victory in the U.S. Court of Appeals for the Seventh Circuit in Kennedy v. Lilly Extended Disability Plan, 856 F.3d 1136 (7th Cir. 2017), a case involving the denial of disability benefits to a claimant with fibromyalgia.
Learn More About Life Insurance Law
Understanding Evidence of Insurability in Group Life Insurance: Employer Obligations and Employee Rights
Unlike individual life insurance, which requires rigorous underwriting to assess risk, group life insurance from employers does not require underwriting. Employers offering group life insurance allow new employees to enroll immediately without providing evidence of insurability (EOI). The reasoning is that a new employee is likely to be healthy, and the risk of adverse selection is low. […]
6th Circ. Ruling Highlights Complexity Of ERISA Preemption
If you murder someone to collect their life insurance, are you barred from receiving the proceeds? That would seem to be a simple question, but it isn’t if the Employee Retirement Income Security Act is in the picture. […]
Ensuring Life Insurance Continuation After Employment Ends: Employer Obligations and Employee Rights
Many employees receive group life insurance coverage as a benefit of their employment. But what few employees understand is that life insurance coverage does not necessarily end when employment ends. […]
Contact Us to Get Started on Your Life Insurance Case
Time is critical in life insurance denial cases, as strict deadlines can affect your ability to recover benefits. Our team brings more than 60 years of combined experience in ERISA and insurance law, with a strong track record of challenging wrongful denials. We understand the tactics insurance companies use to delay, reduce, or deny legitimate claims, and how to respond strategically.
With offices in Chicago and Seattle, DeBofsky Law represents beneficiaries in life insurance disputes nationwide. Our attorneys have litigated cases in federal courts across the country, including the U.S. Court of Appeals for the Seventh Circuit, and have handled claims involving every major life insurance carrier. Whether your claim involves an employer-sponsored ERISA plan or an individual policy, we are prepared to protect your rights and pursue the benefits you are entitled to before important deadlines are lost.
Frequently Asked Questions
Life Insurance Law FAQs
What should I do if my life insurance claim is denied?
When should I hire a life insurance attorney?
What are typical fees for a life insurance lawyer?
What happens in an initial consultation with a life insurance lawyer?
How long does it take to resolve a denied life insurance claim?
The timeframe depends on the type of policy and the issues involved. Administrative appeals under ERISA-governed plans typically require 45 to 60 days for the insurer to respond. If the appeal is unsuccessful, federal litigation may take a year or longer. Non-ERISA claims filed in state court follow their own procedural timelines. Some claims are resolved more quickly through effective pre-suit appeals, while others require full court proceedings. Acting promptly can help avoid unnecessary delays.
What if the life insurance premium was unpaid at death?
Who gets the life insurance payout if the beneficiary is unclear?
Can a life insurance payout be taxed?
What qualifies as bad faith denial by insurers?
Can I handle a life insurance denial on my own?
