Too often, beneficiaries go to collect life insurance benefits after the death of their loved one; only to be denied because the policy lapsed. If the policyholder's account is not sufficient to pay for the premiums, the policy is considered lapsed.
Too often, beneficiaries go to collect life insurance benefits after the death of their loved one; only to be denied because the policy lapsed. If the policyholder's account is not sufficient to pay for the premiums, the policy is considered lapsed. Once this happens, the insurer is not obligated to issue any benefits contained in the policy. However, they can use the grace period where the insurer can offer coverage when a payment is missed and provide payment to the insured's beneficiaries. Still, if the grace period lapse and the insurer doesn’t receive due premiums, the policy is considered lapsed. This brings up the question of whether there is a way one can claim payments, even when the insurance company uses policy lapse as the basis to deny benefits.
How Beneficiaries Can Claim Life Insurance Benefits After Policy Lapse
Sometimes unexpected clicks in; however, this comes with possible consequences for those who are unable to pay premiums for their life insurance policies. Just like any other insurance policy, one needs to make regular premiums. This ensures that the beneficiaries are provided with death benefits with ease. Insurance companies are known for their notorious reluctance in giving out what the insured deserves. Thus, the best way to claim for life insurance benefits when the policy has lapsed is to be armed with the knowledge from top Anchorage law firms. After your loved one's death, you will want to get the claim process started as soon as possible. But before that, it important to have an answer to the below questions:
- What type of life insurance was bought by the deceased: Was it permanent life insurance or whole life insurance? Was it a group or individual coverage?
- What were the policies in force? Were the premium charged to increase over time?
- How much do I expect to receive as a beneficiary?
- How quickly will the benefits be paid?
Following the death of the insured, the beneficiaries should contact the insurance company as soon as possible. In Alaska, insurance companies must pay timely death benefits. Failure to do so may result in hefty fines for the company. Nevertheless, to ensure that the policy lapse is genuine to allow you to receive the benefits, it would be better to hire an attorney who has dealt with such cases before. Your lawyer needs to prove that the insured accidentally missed some premium payments and hence the policy lapsed. This could be due to:
- Unexpected end of employment and the insured is not aware of the dangers of policy lapse
- Significant health change such as being in a coma that made the insured miss payments
Regardless of what made the policy unaffordable, the insured should reinstate the policy. A lapse of policy not only means loss of protection but also paying more when reinstating it.
Filing A Claim For Death Benefits
The insured should provide the beneficiaries with the information about the life insurance policy such that when death occurs, they can file a claim to request benefits. Reinstatement means that the policy becomes active. Once death occurs, beneficiaries won’t have a hard time getting what is entitled to them. To begin your claim process, you need to contact the life insurance company. Nowadays, you can have this completed over the phone. However, you may only do this to inform the company about the claim, but the life insurance payout will be processed if you have any evidence in writing. As evidence, you may need:
- A copy of the insurance policy
- A copy of the death certificate of the insured
- Statement of claim signed by the beneficiary
After submitting the above, the insurer will have 30 days to process your claim. If they don’t deny the claim, you may receive the payment within two months. It’s worth noting that even if the insurer fails to pay, the Alaska Life and Health Insurance Guaranty Association may protect your rights. This process is not as straightforward as some may think; you need to have legal representation, especially if you have doubts about the policy lapse. If the insurer is to deny the claim, they must provide the reason. Some possible delays happen if the insured dies within the first two years after the policy issuance. The delay occurs as the company looks for facts to ensure there was no fraud.
If your loved one has passed away and the insurance company has denied your claims based on period lapse, don’t hesitate to seek help from an experienced attorney. Such a lawyer has sophisticated strategies of dealing with insurers. Through legal advice, you will know whether there is any point of pursuing a claim and whether the insurance company followed the right process when denying you the benefits.
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