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How a Death at Home Can Affect Your Life Insurance Benefits

After your elderly relative was diagnosed with terminal cancer, she made one thing clear: she didn’t want to die in a hospital.  You did the right thing: you took her home, made her comfortable, and made sure she lived out her last few months exactly where she wanted to be.

Today, more and more people with terminal illnesses are making the decision to die at home under hospice care.  Dying at home affords your loved one peace of mind in their last days, so it is outrageous that insurance companies will use it as an excuse to deny benefits after your loved one passes.

How does this affect your life insurance benefits?

Insurance companies know that people rarely have only one type of insurance coverage.  If they can, they will try to get your other insurance providers to pay out before they do—or to get them to pay a larger portion of your benefits.

When your loved one dies at home, the life insurance company may claim that the death was a result of an accident on the property, and should therefore be covered by homeowner’s insurance.  They may even go so far as to deny your claim based on suspected suicide if your loved one died suddenly after being diagnosed with a terminal illness.

How could homeowner’s insurance be involved?

If your loved one died at the family home, you may experience problems if they did not have homeowners insurance or allowed the policy to lapse.  After your relative passes, any damage or accidents that occur there will have to be paid by the new property owner: you.  If you or your family move into the home and it is burglarized or damaged, you will not be compensated for the items you have lost.

Additionally, many seniors choose to move to warmer climates after they retire.  Unfortunately, they sometimes forget to transfer their homeowners insurance to their new home, leaving them especially vulnerable to accidents at their new location.  If an elderly relative is injured in a house fire without homeowner’s insurance, they will likely have to pay for any damages as well as the medical costs of injury—and if the injury leads to death, the family will lose out on much-needed benefits that homeowner’s insurance would have covered.

Is there anything I can I do?

  • Prepare.  If possible, locate all insurance documents before your loved one dies.  Many people do not like to think about getting their affairs in order, but it will be ten times more difficult after a death than before.
  • Add your name.  It is vital that you not only file a life insurance claim on behalf of the deceased, but also contact his homeowner’s insurance company to request that you be added to his policy as the “named insured.”
  • Get a lawyer.  If your life insurance company has denied your benefits, contact the attorneys at Life Insurance Law today for a free consultation.