Deceased died within 2 years of the policy being taken out the policy has to be investigated now even though she died of natural causes.

  1. 447 POINTS
    Thad Bynum
    Owner/ Partner, Bynum Insurance Agency, Inc, Clayton, GA
    The life insurance company can take enough time to make sure that the answers given were not materially misstated. In other words they have the right to not pay out if the answers given on the application had they been correct would have kept them from issuing the policy in the first place. If the insured had indicated an incorrect eye color, this would not have been material, but if they had failed to list a heart condition this would have been a misstatement that would cause them to deny the claim. The time it will take will depend on the company.
    Answered on June 30, 2015
  2. 3998 POINTS
    Matt Benore
    Founder, DenverWest Insurance Professionals, Inc.,
    This is probably one of the most frustrating times during the claims process with Life Insurance. For planning purposes I would be prepared for 90 days. If you are the beneficiary, you should get a letter through out the process letting you know where the process stands or if there is additional information that you may be able to provide if necessary.

    If you have questions during this time do not hesitate to reach out to agents on this forum or feel free to contact me direct. You can find my information in my profile. Be patient but diligent.
    Answered on July 1, 2015
  3. 21750 POINTS
    Jim Winkler
    CEO/Owner, Winkler Financial Group, Houston, Texas
    That is a great question! One I'm sorry that you have to ask...I'm sorry for your loss. Each Stat's Department of Insurance will have in its codes the specified time limits for filing claims, beginning the processing, and for making the payments. You may want to look there for your answer. The fact that your loved one passed so soon after purchasing the policy is always a red flag for the insurer, their first assumption is that there was a desperate health issue that led to the purchasing of the policy, and perhaps some dishonesty in the application answers. That is certainly not always the case, but that is how they treat it. They will ask for Doctor's statements, coroner's or autopsy reports, police reports, whatever documentation they need to determine if the timing was coincidental, or expected. Once they've received all of the documentation, the process moves pretty quickly. I'd expect the process to take between 6 weeks and 90 days, maybe longer, maybe sooner, depending upon how quickly everything is received.
    In any case, you will receive a payment for some amount. It will either be for face value of the policy, if they find in your favor, or for what had been paid in premiums over the length of time the policy had been issued, and some amount of interest, if they don't. Should the latter be the case, you do have the right to appeal, but you'll need a good lawyer and some money to outlast the insurer's lawyer and overturn the decision. If you feel that you've been wronged by them, you have the right also to file a complaint with the State. If you do so, be nice to your agent, because unless they advised you to misrepresent the truth, or have you apply fr something that wasn't appropriate, I can guarantee you they had no part in the decision that was made by the company, In fact, they will have been asked for a statement also, and would have had to tell their impression of your loved one's health.
    I'm sorry for your loss, and I hope everything works out for you. Thank you for asking!
    Answered on July 4, 2015
  4. 2777 POINTS
    Terry A. McCarthy, CLU, ChFC
    President, Insurance Associates Agency Inc., West Chester, OH
    The reason the claim is being contested is because the carrier has a right, and a duty to its policyholders, to make sure that the application was accurate and information it contains didn't materially misrepresent the health or history of the insured. People do resort to different moral standards when faced with the end of life without adequate financial resources for their family members. And, agents may not provide the best guidance while assisting in application completion. Once submitted, however, underwriting a new application is usually thorough and methodical. Within two years though, when a claim occurs within the contestable period, there are enough reasonable questions about the health and condition of the insured that these issues are revisited as a matter of due diligence. That is why the contestable period exists. Claims laws in every state do not give the carrier the discretion to drag their feet and they must generally act on the claim within a reasonable period after it is presented. My experience is that the benefit is paid within 60-90 days or sooner if the application was accurate and all known issues were admitted and acknowledged on the application (when the cause of death is not in dispute). Nevertheless, it is a difficult time to be asked to wait for the policy proceeds. It has been my experience that the delay is usually reasonable and almost always results in a death benefit being paid. When challenges are found to the veracity of the application, it becomes more complicated and these increase the chance that all that will be paid is the premium and interest and not the life insurance benefit. That is a rare event, on average. However, insurance companies cannot be asked to pay for claims on individuals when their condition would not have been accepted and a policy issued. To conceal material fact is a reason any contract can be voided and life insurance is just another form of contract, in the end.
    Answered on July 6, 2015
  5. 1492 POINTS
    Jeff Davis
    Insurance Advisor, Lordship Insurance Services, California
    The answer will vary depending on the reason for the contest. Typically a policy is contested if the Insurer believes that what they originally approved (the insured current condition at time of policy issue) and what actually is does not match. Lets say an applicant dies from a form of cancer and it was determined that they had this condition for years and knew about it. If it was disclosed prior to policy issuance and the policy was issued anyway, there would be no reason to contest. But if it was not disclosed and the Insurance company would have denied issuing the policy had they known it will be contested.

    One of the best way to ensure this does not happen is to be honest when applying. Insurance companies have to evaluate risk before issuing a policy. If they feel it is an acceptable risk they will issue a policy. If not it will be denied.

    I hope this answers your question.
    Answered on July 16, 2015
  6. 102 POINTS
    Anthony Griffin
    There is no set deadline for an insurance company to pay out a claim that is being contested. Every state has laws that require the company to act in a reasonable period of time. This time frame varies from state to state, but can be found out by contacting your state insurance commissioner. If it is taking longer than you think it should to receive the pay out on a life insurance claim you should start by first contacting the company, and then the state insurance department.
    Answered on August 6, 2015
  7. 7479 POINTS
    Steve Kobrin
    President, The Firm of Steven H. Kobrin, LUTCF, 6-05 Saddle River Rd #103, Fair Lawn, NJ 07410
    I can give you some insight based on my own experience.

    A number of years ago, I had a client with a history of heart disease. He was a young guy – in his early 40’s. Unfortunately, by that age he had already suffered several heart attacks.

    Every year he would ask me to go to market and see if I could get him an additional policy. Of course, I would disclose his heart history to every new carrier. They in turn would do their due diligence and review all his medical records before approving his application. Everything was on the up and up.

    I did succeed in getting him additional coverage. As you can imagine, he had to pay extra due to his medical history. But for him it was worth every penny.

    I guess he kind of had a feeling the big one was coming.

    Sure enough, after I had sold him about the fifth the policy, he did have another heart attack. It was a bad one, and he had to go into surgery. He died on the operating table.

    As the broker, I expedited all the claims. One of them was shortly after the policy has been put into force. You can imagine how the insurance company took a close look at that claim.

    I was very confident that things would go smoothly because I had gone through full disclosure, and the carrier was fully aware of his medical history. I knew it, and they knew it. Nothing to hide.

    The net result was that it took less than a week of additional time for the benefit check to be issued.
    Answered on August 27, 2015
  8. 10968 POINTS
    Tim Wilhoit
    Owner, Your Friend 4 Life, Brentwood TN
    A contested life insurance policy can take months to investigate. As you may imagine when dealing with a large amount of money, life insurance death proceeds, the insurance carrier will be sure that they have conducted a thorough investigation. That being said, there is no set time period when a death claim is contested. Every situation is different and unique. A good experienced agent can be a great asset to move these investigations along, but they can and will take a lot of time. Best of luck!
    Answered on February 14, 2016
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