Fort Worth life insurance attorneys need to know the areas of dispute concerning life insurance policies.
Life insurance coverage is pretty plain to understand. If the person whose life is covered under a life insurance policy dies, then the insurance company is to pay benefits to the named insured. Here are a list of reasons why a dispute may arise concerning the payment of benefits under a life insurance policy:
1) An insurance agent may misrepresent the benefits of his insurance company policy to induce the insured person to switch from another company to the one he represents and can make a commission from;
2) The insurance agent may fail to obtain coverage in a timely manner, and the insured dies without the coverage being obtained;
3) An insurance agent may fail to disclose that health conditions may cause the insured’s application to be rejected. If the insured was induced to let another policy lapse based on the expectation of replacement coverage, the insured may have no insurance. This can happen in health insurance situations also;
4) The insurance agent may present information or illustrations in a way that creates certain expectations about premiums or cash value, and the the policy does not perform as represented;
5) The insured person may have certain medical conditions that would be material to the insurance company decisions whether to offer insurance and at what price. Because the agent fills out the application and wants the policy issued so that he or she can earn a commission, the insurance agent tells the insured person that the answers are not important, or the insurance agent simply puts down wrong answers. Then, when the insured person dies, the insurance company learns of the false answers and denies coverage. Texas Insurance Code, Sections 705.004 and 705.104 become very important at this point;
6) The insured person may have certain medical conditions that would be material to the insurance company decisions whether to offer insurance and at what price. Because the insured person wants coverage and fears being rejected, the insured provides false, more favorable answers to health questions in the application. When the insured person dies, the insurance company learns of the false answers and denies coverage. (ditto #5 above);
7) Sometimes the insured person will give wrong health answers that are important to the insurance company, but the answers were completely innocent or made by accident;
8) Sometimes a person seeking coverage gives truthful answers in the application but between the time the application was given and the time the policy issues, a condition develops or is learned about and the insured person fails to disclose this new information to the insurance company;
9) This is rare, but every so often an insurance company receives a death claim when there is reason to believe the insured person is not dead;
10) Sometimes a person makes a claim for death benefits when the person is not a beneficiary under the policy. When there is a dispute about who is entitled to the proceeds of an insurance policy, it it proper for the insurance company to inter-plead the the policy proceeds into the escrow of an appropriate court;
11) Other times, the beneficiary is or is suspected of being the one who caused the death of the insured and possibly making the beneficiary unqualified to receive the proceeds of the policy;
12) When the insured person’s death is due to suicide, there may be an exclusion from coverage. There may be many other exclusions also;
13) Other disputes arise because the insurance company is simply taking too long to pay the claim. This is properly addressed by the Texas Prompt Payment of Claims Act.
The one thing to take from all the above is this – When a claim for benefits is denied or taking too long, consult an attorney experienced in life insurance disputes.
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