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Life Insurance Ripoff Lawsuit

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Although insurance companies have a right to investigate life insurance claims many policyholders complain they have had an insurance claim denied for unethical reasons. Failure to uphold a life insurance contract and failure to payout benefits after death could be construed as bad faith insurance on the part of the insurance company and could lead to a potential life insurance lawsuit.

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Bad Faith Life Insurance

If an insured person dies during the contestability period (usually two years from the time the policy is issued), the insurance company investigates the application, to be certain the insured person did not lie or issue false statements when applying for life insurance. Some insurance companies, however, have been accused of denying benefits after death because of misstatements on the application even though those misstatements have no bearing on the insured's death. For example, an insurance policy claim might be denied because the insured lied about smoking, even though he died in a car accident. If the misstatement was about a situation unrelated to the cause of death, the insurance company must pay out the claim.

If, however, the insured dies more than two years after the policy is issued most states require the insurance company to pay out the death benefits.

Denial of Accidental Death Benefits

Some insurance companies may deny paying accidental death benefits, claiming that what killed the insured was not an accident. This may happen even if official reports state the insured's death was an accident. For example, in the case of an automobile accident, the insurer might claim the death was self-inflicted or caused by negligent driving to avoid paying accidental death benefits. Or they may claim that a death was caused by a preexisting medical condition as opposed to an accident. Insurers may claim an accident was not an accident, even if the Certified Death Certificate and the Medical Examiner's Report rule the death an accident.

Life Insurance Lawsuits

Denying death benefits can save insurers money. According to an article in Bloomberg (3/1/11; citing a report from the American Council of Life Insurers), in 2009, insurers denied $396 million in death benefits. In many cases they get away with it because beneficiaries decide not to pursue the matter. That said, life insurance lawsuits have been filed against insurance companies accused of improperly denying benefits after an insured has died.



Life Insurance Ripoff Legal Help

If you believe you or a loved one has been ripped off by a Life Insurance Company, please click the link below and your complaint will be sent to a lawyer who may evaluate your claim at no cost or obligation.
Last updated on Oct-10-13

LIFE INSURANCE RIPOFF LEGAL ARTICLES AND INTERVIEWS

Consumers Hit with Massive Universal Life Premiums Join Class Action
Consumers Hit with Massive Universal Life Premiums Join Class Action Los Angeles, CA: Rip off is a harsh term, although one plaintiffs embroiled in Life Insurance Rip Off lawsuits use with complete comfort. At the very least, consumers holding universal life insurance policies currently facing massive rate increases are stuck with a classic catch 22 situation, in that policyholders annoyed with rising premiums, or unable to pay them, have few alternatives given their age [READ MORE]


READER COMMENTS

Posted by
graham williams
on
2003 purchased a super preferred class, 20 year term life policy for 114.29 from a major ins. Co. I am at the conversion statusso I pulled the policy out and started reviewing my options. The illustration page with mine and companys signatures which is a requirement of this policy to be enforcible or valid is signed with my legal name and the agreed amount premium of 114.26. PROBLEM: I have been paying 159.29 for 13 years through AFT.....I did not get a new illustration to sign or was I notified my class and policy had changed. The company agreed there is no illustration page for the 159.29 amount or new class because they tried to reach me for a year to get me to sign a new one and at a year and a half they gave trying. My agent who I was friends with had sold me house, business, car and life policies on me and my kids. I was in touch with him no less then 6 or 7 times a year. He never approached me about signing a new page or informed me about the change. ALSO, I would periodically tell my agent, people in his office and people at the corporate level that I did not have a middle and to change my policy name to reflect that. They never changed a thing. The policy I am speaking of was issued with a middle initial. The corporate insurance office wants to mail me a illustration page to sign, to reflect what I have been paying for all this time. Can they do that? I feel they tried to do a bait and switch. I feel I have been paying for a non valid unenforceble policy. My policy has a benefit of $500,000 dollars. If I had passed they probably would have paid only the premiums I had paid since they were taking the money. What are my options.

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