Life insurance is almost a necessary product. We buy life insurance to protect and prevent our beneficiaries from suffering financially – while they are suffering emotionally. There is no doubt that if we pass away unexpectedly, we would want to ensure that our loved ones are not stuck paying our debts; we need to give our loved ones financial recovery because we are no longer around to contribute to shared expenses; provide financial support to our dependents; help cover our funeral costs; ensure that our children’s education expenses are paid and to help pay off estate taxes.
When you are dealing with the loss of your loved one, the last thing you need is a fight with an insurance company that you trusted and dutifully paid premiums to over many years. Your loved one purchased a life policy to protect you in the event of his or her death – and now, in a time or grief and need, the insurance company is giving you a problem on the payout. It is not uncommon that life insurance companies refuse to pay life insurance claims, hoping that you as the beneficiary will not pursue the matter or take some reduced payment to avoid a legal conflict. Too often, grieving families must hire a life insurance lawyer in order to get the life insurance payments that they deserve.
At the time of a payout, insurance companies are mostly known to deny a payment based on material misrepresentation. What is material misrepresentation? At the time of your application for life insurance, the duty rests on you as the applicant to disclose all information which would be regarded by a reasonable insurer as material to the risk. If anything material is concealed or misrepresented that should have been disclosed, then the question asked by the insurer is, whether or not that information, had it been disclosed, might have influenced the insurance company to decline the risk or to have stipulated for a higher premium. The lack of information provided – or misrepresentation – has to be “material,” meaning, would a reasonable insurer have denied the risk or charged higher premiums.
If a life insured dies within the first two years of a life insurance policy being issued, any failure to disclose a known material fact can serve as the basis upon which the insurer can avoid coverage. Mere innocent forgetfulness on the part of the insured is not a defence to having failed to disclose a material fact. But, when an insured person dies more than two years after the life insurance policy was issued, it becomes much more difficult for the insurer to avoid coverage. The insurer then faces a heavy burden in proving that any misrepresentation was fraudulent.
There could be other issues in which a life insurance payment could be denied, such as:
Life insurance essentially “risk pooling”. Today, when something insured is destroyed or lost, such as a car, house or human life, your insurance company should pay you the value of that economic benefit to help compensate you for your loss. Even though life insurance can’t replace your loved on who has died, the money that you receive can ease the economic hardship of your loss, rather directly or indirectly. Just as only a very small amount of buildings burn down to the ground in a year, only a relatively small percentage of individuals will die during a given year – statistically speaking. Actuaries for insurance companies have developed actuarial systems over the years that predict the changes of such loss occurring. Although actuarial systems cannot foresee when a person will suffer a loss, they can predict with extra-ordinary accuracy how often a loss will occur. This enables our society to pool, or share risk of loss. Essentially, if each person contributes a fair and small amount every year – the total of those contributions are deposited into a reserve fund from which a few individuals who have lost loved ones can be reimbursed.
The denial of a claim for a life insurance payment can be devastating and the surviving beneficiaries. It can place very difficult financial strain on a family for the unforeseen and premature death of a loved one. If deceased is a bread winner in the family, it is only life insurance benefits that offer a guaranteed sum of money to the dependents of the deceased to help them readjust unexpected financial insecurities. Life insurance benefits are often denied for various reasons, including non-disclosure of pertinent health information to the insurance company, policy lapse for non-payment, suicide, arguments that the deceased was not insured at the time of his/her death, misrepresentation, fraudulent misrepresentation or negligent misrepresentation.
If you insurance company has denied your claim for life insurance benefits and has told you that they would have not insured the deceased’s policy, after the fact, please contact our Hamilton Lawyers for more information. It is not very often that and insured actions or intentions are deliberate enough to void a life insurance policy or influence an underwriter’s opinion as to the risk that the insurance company is incurring.
It is important to consult with experienced Hamilton life insurance lawyers who will evaluate your life insurance claim and fight for the benefits you are due. We handle life insurance disputes in Hamilton and throughout. Please do not hesitate to contact us at 905-333-8888 or by speaking to our live chat operator who will certainly assist in setting up a free consultation. We would be happy to assist you and provide you the best possible legal advice and options to assist with your situation. Our Hamilton lawyers don’t charge for the initial consultation and we represent most of our insurance clients on a contingency-fee basis. This means that you won’t owe us anything unless we recover money from the insurance company through a settlement or litigation.