There is no hiding on the fact that a significant number of insurance companies are not enthusiastic when it comes to paying insurance claims. You will find insurance companies trying to come up with unjustifiable excuses on why your claim should not be honored.
It is unfortunate that some of the claims that are denied have all the necessary merits and deserve to be honored by the insurance companies. This is especially, when there is no valid reason highlighted by insurance companies as to why a particular claim should not be paid.
One of the commonly denied insurance claims is the death benefits that entitled beneficiaries are supposed to get after their loved one passes out. It is common knowledge that a life insurance claim is easily denied and sometimes delayed. A considerable number of insurance companies have denied life insurance claims to various parties even after all the necessary documents have been submitted.
Therefore, you need to prepare in advance so that you can avoid a situation where your insurance company denies your beneficiaries death claims. You can prepare by understanding various rules that govern life insurance policies so you can heed to them to the letter.
1. Payment of Premiums
Insurance entities are very strict when it comes to the payment of the agreed premiums. You need to make sure that you’ve been paying your premiums without missing any month. Most of the insurance companies will immediately terminate an insurance policy if you skip a single payment. This will make you lose money and lose the entire policy.
However, the law requires insurance companies to issue a notice before terminating the policy so that policyholders can be aware of the impending danger. If you want your life insurance claims to be processed without challenges, you need to make sure that you’ve been paying the premiums without missing an installment.
2. Providing Correct Details
Every time you are buying a life insurance policy, you are entering into a legal contract with an insurance company. Therefore, for a contract to be valid, all the details must be correct and justified. You’re required to present only the facts so that you can enter the agreement in good faith. The same should be expected from the insurance company.
However, a considerable number of policyholders misrepresent facts so that they can pay low premiums. Misrepresentation of material information such as income, weight, health, hobbies, age, and criminal history is an excuse that insurance companies can use to deny your family life insurance benefits. Therefore, you should always focus on presenting the correct details.
3. Name Beneficiaries
A life insurance policy is an insurance cover that is specifically designed to benefit the individuals mentioned on the policy. Therefore, insurance companies require that you name the beneficiaries of your insurance claims so that you can avoid a situation where there is a conflict of interest after death.
A recent research study shows that a significant proportion of life insurance policies have not mentioned or clarified on beneficiaries. This means that insurance companies can deny claims to any person who purports to be the beneficiary. Therefore, you should make sure that you name all the beneficiaries on your policy to avoid court battles.
Law Office of Matthew L. Sharp notes that, when no beneficiary is named on the policy, insurance companies may delay or deny the claim, and sometimes, pay the claims to the wrong person.
4. Understand Life Insurance Policies
One of the most important strategies that you can use to avoid being denied life insurance claims is understanding your policy. Most people purchase ignorantly, get into a life insurance contract without understanding what it entails and the circumstances under which claims can be denied. Unfortunately, these individuals find themselves on the receiving end when the policy provider denies them life insurance claims.
You need to understand most of the terms and language used in life insurance policies such as contestability period among others. You also need to understand that death caused by dangerous conditions such as rock climbing, skydiving, and extreme sports cannot be assured by life insurance companies.