It’s unfortunate, but some life insurance beneficiaries have been shocked to find their loved one’s life insurance policy has been cancelled postmortem. While postmortem life insurance cancellation is not very common, it usually happens with policies which are less than two years old. Since some states allow a life insurance company to cancel a policy within two years of issuing it, a policyholder who dies within two years of purchasing their policy can face postmortem cancellation.
Is Postmortem Life Insurance Policy Cancellation Legitimate?
Generally speaking, a postmortem life insurance policy cancellation is not legitimate. However, if the policyholder recently purchased their life insurance policy and then dies within 2 years, the insurance company may place the policy on a review list.
If an insurance policy is held for review, an investigator may look into whether or not a policyholder did any of the following:
- Lied about their financial situation
- Engaged in material misrepresentation
- Hid an existing medical condition, even if it’s not related to the policyholder’s death
- Has any unpaid premiums
- Committed suicide
They may also investigate to see if the beneficiary engaged in foul play which led to the death of the policyholder.
If they can prove that any of the above issues exists then a claim denial and postmortem policy cancellation may prove legitimate in a court of law. However, the past few years, many courts have ruled that postmortem insurance policy cancellations were patently unfair. They’re especially unfair if the life insurance policy had enough time to discover the deficiencies before the policyholder died.
What Happens After A Cancellation?
A beneficiary who receives a life insurance claim denial and policy cancellation may also receive the return of the policyholder’s premiums. This happens most often in cases where the policy payout amount is significantly larger than premiums already paid.
Beneficiaries who want to fight a claim denial and policy cancellation should NOT cash any check sent by the insurance company. Cashing a check for the return of premium payments means that the beneficiary agrees that they have no right fight their life insurance claim denial.
How To Fight A Postmortem Policy Cancellation And Claim Denial
Beneficiaries facing a claim denial and postmortem policy cancellation should make sure they don’t cash any checks sent to them. They should also gather all the medical records of their deceased loved one, along with the contact information of any medical professionals who can testify on their deceased relative’s behalf. With the help of an experienced life insurance attorney, beneficiaries can effectively fight life insurance claim denials and postmortem policy cancellations.
The life insurance lawyers at Life Insurance Law are committed to winning justice for individuals and families who have experienced a life insurance claim denial. Understanding that the primary objective of life insurance companies is to deny insurance claims, Life Insurance Law is prepared to utilize all of our knowledge and legal tools to fight and win your case in the most expedient and effective manner possible. We are also committed to winning the largest payout for you and loved ones. If you are experiencing a life insurance claim denial contact us today.