At Crosley Law, we’ve helped many grieving families after the unexpected loss of a loved one. While we focus our practice on catastrophic injury claims, our clients frequently come to us with questions about life insurance claims.
Below, our lawyers outline the essentials of Texas life insurance law.
How Do Life Insurance Policies Work?
After a loved one’s death, you’ll have to wrap up their affairs and distribute their assets to their heirs and beneficiaries. In addition to their home, bank accounts, and personal items, they may also have life insurance policies.
“While the policy structures are different, there are some common elements to every life insurance policy.”
There are two primary types of life insurance policies:
- Term life insurance covers a limited time period, such as ten years, unless it’s extended.
- Whole life insurance covers a longer period of time or the policy-holder’s entire life and builds cash value over time.
Permanent life insurance policies are also categorized as “permanent life” or “universal,” depending on their terms and conditions.
While the policy structures are different, there are some common elements to every life insurance policy. First, each policy has a set amount of coverage for death benefits. If the circumstances surrounding your loved one’s death meet the policy’s requirements, the insurance company should pay this amount when you file a claim.
Second, your loved one named a beneficiary or series of beneficiaries for their life insurance policy. Beneficiaries are typically the only people who have a right to file a life insurance claim and receive its death benefits. If there are multiple beneficiaries, each person will get a specific percentage of the life insurance benefits.
How Do I File a Life Insurance Claim?
When you file a life insurance claim, you may need to provide copies of your loved one’s death certificate and other end-of-life documents. The insurance company may have you complete a series of forms. The insurance company will then review the claim and decide whether you are eligible for life insurance benefits. Depending on the circumstances surrounding your loved one’s death, the company may also ask you for additional information that supports your claim for death benefits.
If the company approves your claim, you should promptly receive your share of the life insurance benefits. However, if you’re denied, don’t give up. Instead, consult with a lawyer to help you decide whether to pursue your claim further. Sometimes, life insurance companies improperly deny claims — and you have the right to appeal their decision.
Common Reasons for a Denied Life Insurance Claim
Every life insurance claim is different and deserves a personalized analysis from a life insurance lawyer. However, we’ve noticed some common trends in life insurance denials.
Late or Missed Life Insurance Payments
Mistakes happen, and people sometimes miss a payment or make late payments. If life insurance policy premiums aren’t up-to-date, the company may deny a claim. However, the laws surrounding lapsed policies and late payments are complicated, and you may still have a valid claim under certain circumstances. If you have questions about a lapsed life insurance policy, consult with a life insurance lawyer right away.
There Were (Alleged) Misrepresentations
Life insurance companies use information about a policy-holder’s age, medical conditions, and health risks to calculate premiums and available coverage. When someone makes inaccurate statements, either intentionally or accidentally, the insurance company will sometimes use these mistakes to deny a claim, especially if the claim is made during the “contestable” period, which usually is the first two years after the policy was issued.
RELATED CLIENT SUCCESS STORY: Esther’s Story: Crosley Law Helps a Grieving Family Find a New Purpose
However, not every mistake or omission is grounds to deny a policy. For example, we represented a widow whose husband listed his doctors and medical history when he applied for his life insurance policy. Later on, the company tried to deny his wife’s claim even though it never bothered to review his medical records before issuing the policy.
Instead, the life insurance company denied the claim on the basis that he failed to disclose that his doctor had recommended he undergo a certain medical procedure which may have revealed the presence of cancer. With help from Crosley Law, she proved the company wrong and was able to receive the insurance proceeds due under the policy, plus reimbursement of her legal fees as well.
The Policy Doesn’t Cover Your Loved One’s Cause of Death
Sometimes, a life insurance policy will exclude certain causes of death. While this is becoming less common, there are still policies that will deny life insurance benefits after a suicide, a death that occurs while committing a felony, or certain dangerous activities.
RELATED ARTICLE: What Can You Do When an Insurance Company Acts in Bad Faith?
However, sometimes there are limits to these exclusions. For example, after a period of years, a life insurance policy may cover suicide. For this reason, you should always consult with a lawyer when a life insurance company tries to use a policy exclusion to deny a claim. With a careful investigation, it may turn out the exclusion doesn’t apply.
Denying a Life Insurance Claim in Bad Faith Is Illegal in Texas
Texas law recognizes there is an extreme imbalance of power in insurance claims. Since you’re probably unfamiliar with insurance law and medicine and have never read a policy, all insurance companies must act in good faith when they’re reviewing and processing claims. That means that they cannot:
- Unreasonably delay life insurance claims
- Deny a claim without an adequate investigation
- Refuse to give you a reason for a denied claim
- Deny claims that are clearly valid
- Unreasonably delay the payment of death benefits
- Make intentional misrepresentations about the policy’s language or the law
- Threaten or intimidate you or other claimants
- Withhold information about your life insurance claim (when requested)
If you can prove the insurance company denied or delayed your life insurance claim in bad faith, they may owe you more than death benefits. A judge may order them to compensate you for your pain and suffering, attorney’s fees, and other losses — and award punitive damages that punish the insurance company for its misconduct.
While some insurance companies and adjusters are more likely to push boundaries and act in bad faith, the State of Texas does not require them to report bad faith allegations to the Texas Department of Insurance.
If you believe an insurance adjuster or company was acting in bad faith, you should immediately contact a life insurance lawyer at Crosley Law.
RELATED ARTICLE: Crosley Law Partners with Loss of Life Advocates
Crosley Law: Demanding Justice for Life Insurance Beneficiaries
At Crosley Law, we’re proud to serve Texans during their most challenging times. Whether you have questions about a life insurance claim, a personal injury case, or another serious legal issue, we’d love to hear from you. To request a free consultation, simply complete our online form or call us at 210-LAW-3000 | 210-529-3000.
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.
Related ArticlesView All Blog Articles
Texas’ COVID-19 Jury Trial Recommendations: What You Need to KnowOct 24, 2020
Before COVID-19, Texas courts heard approximately 186 jury trials each week. Between March 12 and August 28, 2020, there were only 20 jury trials heard in our state. Currently, there are thousands of cases waiting for a trial in Texas, and the number is growing every day. On August 28, 2020, Texas issued new recommendations […]
I Wasn’t Wearing a Seat Belt During a Crash. Now What?Nov 26, 2019
We’ve all heard the slogan, “Click it or ticket!” and most Texans buckle up before hitting the road. However, a single decision can result in tragedy; hundreds of people die every year because they failed to use a seat belt. Other times, defective seat belts fail and leave a law-abiding motorist with catastrophic injuries. Whether […]
Will “Flexible” Trucking Rules Encourage Drowsy Driving?Nov 12, 2019
For years, trucking companies have lobbied against federal hours of service (HOS) rules, which limit the number of hours a driver can operate a commercial vehicle. While these rules are meant to keep everyone on the road safe, the trucking industry argues that they too restrictive and complicated. Now, a series of proposed changes may […]
Ella Allen: Crosley Law’s 2019 Local Scholarship WinnerAug 20, 2019
Crosley Law is excited to announce the 2019 winner of our Local Distracted Driving Scholarship. Each year, our law firm awards one local and national incoming or current college freshman with a scholarship. In the past few years, our scholarship has focused on raising awareness of the dangers of distracted driving. Applicants were asked to […]
Six Months of Crosley CaresJul 02, 2019
With the start of the 2019 New Year, Crosley Law proudly launched the community service branch of our law firm, officially founding Crosley Cares. The brainchild of our Director of Happiness Ruthie Foultz, Crosley Cares was originally a client advocacy service offered because she recognized our clients needed support navigating the often-overwhelming processes involved in […]
Most Interesting Dan in the WorldApr 18, 2019
If you were a newly minted attorney in the late ’90s, chances are your prominent office décor featured wall-to-wall boxes of discovery and a splash of color courtesy of your PC’s tropical island wallpaper. It might have been a similar setting for Daniel M. Pacheco had he continued to forge 60-hour work weeks at a […]
Protect Yourself During a Texas Life Insurance ClaimApr 02, 2019
At Crosley Law, we’ve helped many grieving families after the unexpected loss of a loved one. While we focus our practice on catastrophic injury claims, our clients frequently come to us with questions about life insurance claims. Below, our lawyers outline the essentials of Texas life insurance law. How Do Life Insurance Policies Work? After […]
Who Is Responsible for E-Scooter Injuries?Mar 12, 2019
Since the dockless electric scooter company Bird entered the San Antonio market in October 2018, we’ve seen a steady increase in e-scooter crashes and serious injuries. Unfortunately, this trend is likely to continue. Keep reading to learn more about the rapidly developing world of dockless scooter injury law. Electric Scooters Are Wildly Popular — and […]
Injuries Taking a Long Time to Heal? Where You Were Hurt Matters.Dec 12, 2018
The human body is remarkably complex. Unfortunately, after a catastrophic injury or car crash, you might notice that some of your conditions take longer to heal. While complications can occur in any injury, crash victims with brain, neck, back, knee, shoulder, and other joint issues typically have longer healing times. Below, Crosley Law’s personal injury […]
How Hiring a Lawyer Can Speed Up the Settlement ProcessNov 30, 2018
After a serious car crash or catastrophic injury, many victims struggle with unpaid medical bills, lost income, and overwhelming stress related to finances. The insurance companies know how exhausting all this can be, which is why they use delay tactics that can stretch a personal injury claim out for years. Fortunately, you don’t have to […]
Do you or a family member
need legal advice?
Crosley Law Firm, PC is a professional corporation of trial lawyers focused on representing individuals and families who have suffered serious personal injuries or wrongful death. If you’ve been injured, fill out the form for a free consultation, or call 210-LAW-3000.