The denial of a life insurance claim can be very upsetting. After all, you’ve been paying premiums for years, and the insurance provider rejects the claim just when you or your family most need the benefits. This can be a challenging time that will make you doubt why you bought the policy in the first place. Keep reading as Bill Schantz weighs in.
Common Reasons for Claim Denial
There are a number of potential causes for claim denial. Some of them are listed below by Bill Schantz:
Material Misrepresentation
The life insurance company will inquire about your health, way of life, and employment history when you apply for coverage. It’s crucial that you provide honest responses to these questions. The insurance company may reject your claim if they discover that you lied about any important facts on your application.
Let’s take the scenario where you filed for life insurance but omitted to mention that you smoke cigarettes. Since smoking is a significant risk factor for lung cancer, the insurance provider would probably reject your claim if you later passed away from the disease. Sincerity is crucial while applying for life insurance due to this. It’s always best to tell your insurer about any conditions or risk factors, even if you believe they are unimportant.
Not Providing the Correct Documentation Is a Red Flag per Bill Schantz
The life insurance company will ask you for a number of documents when you submit a claim. Death certificates, police reports, medical records, and other documents may be included. It’s critical that you promptly submit all of the required documentation. If you don’t, the insurance provider can reject your claim. Until they obtain the missing documentation, they might put off processing your claim.
The insurance provider could occasionally ask for additional paperwork that wasn’t initially requested. If this occurs, William Schantz stresses the significance of promptly giving the requested information.
Death Not Covered by Insurance
Bill Schantz claims that you get to pick a death benefit amount and a coverage duration when you buy life insurance. The sum of money your beneficiaries will get if you pass away while the policy is still in effect is known as the death benefit. The amount of time that the policy will offer coverage is known as the coverage period.
Exclusions, or fatalities that are not covered by the policy, are typically listed in life insurance policies. Your beneficiaries will not be entitled to any policy benefits if you pass away due to one of these prohibited causes.
For instance, certain regulations don’t cover war or suicide deaths. Therefore, your beneficiaries would not be able to receive payments from your life insurance policy if you committed suicide or died as a result of war.
Policy Coverage Gaps
Your coverage will expire if you don’t pay your life insurance premiums on time. This implies that it will no longer offer protection. Your beneficiaries will not receive any benefits from the policy if you pass away while it is inactive, Bill Schantz stresses.
To prevent your life insurance policy from expiring, it’s crucial to make timely premium payments. Ask your insurer if they have any payment assistance programs available if you’re having problems paying your premiums.
You might be able to renew a lapsed life insurance coverage under specific circumstances. This is not always possible, and even when it is, there can be restrictions or caveats.
Conclusion
These are some of the reasons provided by Bill Schantz as to why an insurance company could reject a claim. It’s crucial to pay your premiums on time and to apply for life insurance in an honest, transparent manner. Contact your insurer if you have any queries about your coverage.
