Life Insurance Claim Denial

The common reasons life insurers deny or delay death benefits, how the rules differ for employer group policies under ERISA, and what beneficiaries can do about disputes over who gets paid.

Looking for a lawyer rather than a definition? Skip to the state-by-state list of Bad Faith Insurance law firms.

What it means

Life insurers deny or delay death claims for a handful of recurring reasons. The most common is a claimed misrepresentation on the application: during the policy's contestable period, typically its first years, the insurer may investigate the application and rescind the policy if it finds a material misstatement about health, smoking or other risks; after that period most states bar such challenges except for fraud or nonpayment. Others are a lapse for unpaid premiums (the policy's grace period and any required notices matter), a policy exclusion such as the suicide exclusion during the early policy years or exclusions in accidental-death coverage, and disputes about the cause of death.

Coverage through an employer is usually a group policy governed by ERISA, the federal benefits law, rather than by state insurance law. The beneficiary must first file an internal appeal with the plan within the deadline in the denial letter, and that appeal record is often the only evidence a court will later consider; many courts review the decision deferentially, and state-law bad-faith damages are generally unavailable (see ERISA benefit denials). For an individually purchased policy, state law applies: insurers must handle claims under state unfair claims settlement practices laws, and an unreasonable denial can support a claim of insurance bad faith.

Many disputes are not with the insurer but among family members: an ex-spouse still named as beneficiary, a change of beneficiary made shortly before death, or a claim that the insured lacked capacity or was unduly influenced. Many states automatically revoke a former spouse's designation on divorce, but that rule does not apply to ERISA-governed policies, where the plan documents control. When people make competing claims, the insurer may pay the money into court in an interpleader action and let a judge decide. If a policy may exist but cannot be found, the NAIC's Life Insurance Policy Locator searches participating insurers' records.

Where this comes from

When people hire a lawyer for this

Ask the insurer for the denial in writing with the policy, the application and the claim file. Talk to a lawyer who handles life insurance or ERISA claims before filing an ERISA appeal, because the appeal is where the evidence must be put in; many take these cases on a contingency fee. In a family dispute over who is the beneficiary, each claimant usually needs their own lawyer, and acting quickly matters if the insurer has not yet paid.

Worried about the cost? A lawyer can be hired for one part of a case only (limited-scope representation), may be paid from what a claim recovers (contingency fee), or may be free through a pro bono program or legal aid; a court can also waive its own filing fees.

Find Bad Faith Insurance law firms in your state

Choose your state to see Bad Faith Insurance law firms in the city where we list the most; your city may be under “other cities”, A to Z. A state marked “Health Care” has no Bad Faith Insurance listing yet and opens the broader page.

• Alabama (Birmingham)
  +1 other city

  • Montgomery
• Alaska (Anchorage)
• Arizona (Chandler)
  +6 other cities

  • Gilbert
  • Glendale
  • Mesa
  • Phoenix
  • Scottsdale
  • Tucson
• Arkansas (Little Rock)
• California (Anaheim)
  +19 other cities

  • Bakersfield
  • Chula Vista
  • Fontana
  • Fremont
  • Fresno
  • Irvine
  • Long Beach
  • Los Angeles
  • Riverside
  • San Bernardino
  • San Diego
  • Santa Ana
  • and 7 more with fewer listed firms
• Colorado (Aurora)
  +2 other cities

  • Colorado Springs
  • Denver
• Connecticut (Bridgeport)
• Delaware (Wilmington, Health Care)
• District of Columbia (Washington, Health Care)
• Florida (Hialeah)
  +5 other cities

  • Jacksonville
  • Miami
  • Orlando
  • St Petersburg
  • Tampa
• Georgia (Atlanta)
• Hawaii (Honolulu)
• Idaho (Boise)
• Illinois (Chicago)
• Indiana (Fort Wayne)
  +1 other city

  • Indianapolis
• Iowa (Des Moines)
• Kansas (Wichita)
• Kentucky (Lexington)
  +1 other city

  • Louisville
• Louisiana (Baton Rouge)
  +2 other cities

  • New Orleans
  • Shreveport
• Maine (Portland, Health Care)
• Maryland (Baltimore)
• Massachusetts (Boston)
• Michigan (Detroit)
• Minnesota (Minneapolis)
  +1 other city

  • Saint Paul
• Mississippi (Jackson)
• Missouri (Kansas City)
  +1 other city

  • St. Louis
• Montana (Billings)
• Nebraska (Lincoln)
  +1 other city

  • Omaha
• Nevada (Henderson)
  +3 other cities

  • Las Vegas
  • North Las Vegas
  • Reno
• New Hampshire (Manchester)
• New Jersey (Jersey City)
  +1 other city

  • Newark
• New Mexico (Albuquerque)
• New York (Buffalo)
  +2 other cities

  • New York City
  • Rochester
• North Carolina (Charlotte)
  +5 other cities

  • Durham
  • Fayetteville
  • Greensboro
  • Raleigh
  • Winston-Salem
• North Dakota (Fargo, Health Care)
• Ohio (Cincinnati)
  +3 other cities

  • Cleveland
  • Columbus
  • Toledo
• Oklahoma (Oklahoma City)
  +1 other city

  • Tulsa
• Oregon (Portland)
• Pennsylvania (Pittsburgh)
  +1 other city

  • Philadelphia
• Rhode Island (Providence)
• South Carolina (Columbia)
• South Dakota (Sioux Falls)
• Tennessee (Memphis)
  +1 other city

  • Nashville
• Texas (Austin)
  +12 other cities

  • Arlington
  • Corpus Christi
  • Dallas
  • El Paso
  • Fort Worth
  • Garland
  • Houston
  • Irving
  • Laredo
  • Lubbock
  • Plano
  • San Antonio
• Utah (Salt Lake City)
• Vermont (Burlington, Health Care)
• Virginia (Chesapeake)
  +3 other cities

  • Norfolk
  • Richmond
  • Virginia Beach
• Washington (Seattle)
  +2 other cities

  • Spokane
  • Tacoma
• West Virginia (Charleston)
• Wisconsin (Madison)
  +1 other city

  • Milwaukee
• Wyoming (Cheyenne)

Related terms

Other entries in the same area of law, each written from the same primary sources.

• Advance Directive and Living WillDocuments recording medical treatment wishes, and naming who decides, if a person becomes unable to decide for themselves.
• Civil Commitment (Involuntary Psychiatric Hospitalization)The state-law process by which a person can be held and treated in a psychiatric facility against their will - the emergency hold, the court hearing, the standard of dangerousness, and the constitutional limits on all three.
• COBRA Continuation CoverageThe federal right to stay on an employer's group health plan after leaving the job, losing hours, divorcing, or a covered employee's death - at the full premium, for a limited period, if elected in time.
• Elder Abuse and Adult Protective ServicesWhat the law counts as abuse, neglect or exploitation of an older or dependent adult, who must report it, what Adult Protective Services can and cannot do, and the civil and criminal remedies that follow.
• EMTALA (Emergency Medical Treatment and Labor Act)The federal law that requires a hospital emergency department to screen and stabilize anyone who comes through the door, regardless of insurance or ability to pay, before it may transfer or discharge them.
• Fair Hearing (Public Benefits)The hearing you are entitled to before benefits such as Medicaid or SNAP are cut off or denied - a constitutional right, not an agency courtesy.
• False Claims Act and Health Care Whistleblowers (Qui Tam)The federal statute under which false billing to Medicare or Medicaid carries treble damages and per-claim penalties, and the qui tam procedure that lets a private person sue in the government's name and share the recovery.
• Health Plan Claim Denial and AppealThe structured process for challenging a refusal to cover treatment - internal appeal first, then in most cases an independent external review.
• HIPAA and Your Medical RecordsThe federal privacy rules for health information - including a right to get a copy of your own records, which is narrower and more practical than the privacy rule people usually mean.
• Hospital Financial Assistance and Medical DebtThe federal rules that make a nonprofit hospital publish a financial assistance policy, limit what it may charge eligible patients, and restrict how it collects - and what a patient with a medical bill can do with them.
• Informed ConsentA patient's agreement to treatment after being told the risks and alternatives - and a signed form is evidence that the conversation happened, not proof that it was adequate.
• Medicaid Estate RecoveryThe federal requirement that a state recover the cost of long-term care Medicaid paid for from the estate of the person who received it after they die - the reason the family home is at stake, and the exemptions and hardship rules that limit it.
• Medical Malpractice and the Standard of CareA negligence claim against a healthcare provider, judged against what a reasonably competent practitioner in the same field would have done.
• Medicare AppealsThe five-level process for challenging a Medicare denial - of a claim, a service, a hospital discharge, or a nursing-home stay - with a different deadline at each level and a fast track when the care is about to stop.
• Mental Health ParityThe federal requirement that a health plan covering mental-health or substance-use treatment cover it on terms no more restrictive than its medical and surgical coverage - in dollars, in visit limits, and in the prior-authorization and network rules that are harder to see.
• Nursing Home Residents' RightsThe federal bill of rights every Medicare- or Medicaid-certified nursing home must honor - dignity, choice, freedom from restraints and abuse, notice before transfer or discharge - and the inspection and complaint system that enforces it.
• Patient AbandonmentWhen a physician or provider may end a relationship with a patient, what notice and transition care they must give, and when ending it - or refusing to start it - becomes actionable.
• Psychotherapist-Patient PrivilegeThe rule that keeps what a patient tells a therapist out of court - who it covers, who holds it, how it is waived, and the duty-to-warn and child-abuse exceptions that override it.
• Refusing Medical TreatmentThe right of a competent adult to refuse any treatment, including one that keeps them alive; what happens when the patient cannot decide; and the limits the law places on it.
• Social Security Disability Appeal (SSDI and SSI)The four-step process for challenging a denied disability claim - and most claims are denied at the first step.
• Stark Law and the Anti-Kickback StatuteThe two federal laws that govern financial relationships in health care - the strict-liability ban on physician self-referral and the criminal ban on paying for referrals - and why nearly every practice arrangement has to fit an exception or a safe harbor.
• SubrogationThe right of an insurer or health plan that paid your bills to be repaid out of your settlement - the reason a recovery is often smaller than it looks.
• Supplemental Security Income (SSI)The federal needs-based benefit for people who are aged, blind or disabled and have little income or savings: how it differs from Social Security disability, what counts against it, and how to appeal.
• Surprise Medical Billing (No Surprises Act)The federal protection, since 2022, against a bill from an out-of-network provider the patient did not choose - the emergency room, the anesthesiologist at an in-network hospital, the air ambulance - and the good-faith estimate an uninsured patient can hold a provider to.
• Surrogate Decision-Maker (Default Surrogate Laws)Who makes medical decisions for a patient who cannot and who never named anyone - the ranked list most state laws supply, the standard the surrogate must apply, and what a surrogate cannot do.
• Veterans Disability CompensationThe tax-free monthly VA benefit for disabilities connected to military service: what service connection means, how ratings work, and the three ways to challenge a VA decision.

« All glossary terms