Life Insurance Fraud
The insurance business has become a trillion-dollar industry, with total net premiums reaching $1.2 trillion in 2015 (Insurance Information Institute). Of that amount, $635 billion came from health and life insurance premiums. With life expectancies and the cost of insurance continuing to rise, policyholder and beneficiaries alike expect insurance companies to honor their obligations and pay benefits when they are supposed to. Unfortunately, instances of life insurance fraud continue to occur, which means individuals fail to recover funds to which they are legally entitled. At Nahon, Saharovich & Trotz, our Memphis life insurance fraud attorneys understand how insurance companies can wrongfully deny payment, and we can take steps to hold these companies accountable for their actions.How Life Insurance Works
Life insurance is typically sold in two forms: term and whole. Term life insurance requires premium payments over the course of a fixed “term,” typically 10, 20, or 30 years. If the policyholder survives the term, the life insurance policy will expire. Whole life insurance, on the other hand, remains in force for the policyholder’s life, provided that premiums (which are normally a fixed amount) are paid on time and on schedule. Some of the largest life insurance underwriters in the United States include MetLife, Prudential, New York Life, Principal Financial Group, American International Group (AIG), State Farm, and Liberty Mutual.
After a policyholder’s death is reported, the insurance company will begin investigating to determine if coverage applies. The beneficiary will need to formally file a claim and provide a certified copy of the death certificate as well. If there are no issues or questions regarding coverage, it is typical for a benefit to be paid within 30-60 days.Examples of Life Insurance Fraud
Whether from natural causes or a wrongful death, losing a loved one is never easy. The time following the passing of a parent, child, sibling, or close family member is often complicated and complex, with many moving parts such as funeral and burial arrangements. With so many hurdles already in place, the last thing that survivors need is a life insurance company throwing up roadblocks by denying rightful benefits. A life insurance fraud attorney can help Memphis residents and others protect their rights.
There are many ways in which a life insurance company can act unethically:
- Wrongful denial of coverage
- Withholding benefits
- Delay of payment of benefits
- Refusal to settle
- Acting in bad faith
- Unnecessarily increasing a policyholder’s premiums
One of the most common forms of life insurance fraud is wrongful denial of coverage. During the investigation process, the insurance company will want to confirm whether coverage applies to the loss. For example, the insurance company may claim the loss was excluded from the policy, such as alleging your loved one’s death was a suicide, which is almost always a listed exclusion on the policy. Sometimes, the insurance company will request a copy of the deceased’s medical records. While this appears harmless, insurance adjusters can comb through those records to look for any health conditions that may not have been disclosed at the time the policy was taken out. If the insurance company declares a material misrepresentation or omission was made, coverage could be denied outright.
Large insurance companies have also come under fire for failing to pay out benefits when they were aware that a policyholder passed away, but the beneficiaries did not know that a policy existed. Some insurance companies were found to have used Social Security death records to their advantage for policyholders who purchased annuities and life insurance. When they found out that a policyholder died, they immediately ceased issuing annuity payments to that person. However, despite knowledge of death, they chose not to notify beneficiaries of the life insurance policy’s existence and instead, held onto that money.
A life insurance fraud lawyer in the Memphis area will be able to take steps to ensure you get compensated with the life insurance proceeds you deserve. Our attorneys can obtain copies of the policy itself and analyze the policy language in conjunction with listed exclusions. We can also obtain and review medical records and compare them to the policyholder’s cause of death. For instance, if the insurance company claims the deceased never disclosed that he was a smoker, but he passed away upon impact in a car accident, the omission may not be considered material. If the insurance company’s conduct falls below their standard of good faith based on the totality of the circumstances, separate bad faith claims can be asserted in court.Contact Nahon, Saharovich & Trotz for a Free Consultation Today
If a life insurance company has failed to live up to its obligation to you by wrongfully denying coverage, call the Memphis life insurance fraud lawyers of Nahon, Saharovich & Trotz today. We handle all cases on a contingency fee basis, meaning clients do not owe any retainer or attorney fee up front. Instead, the fee comes out of the recovery. For over 30 years, our firm has served clients throughout the South, including Tennessee, Mississippi, Arkansas, Missouri, and Kentucky. Over the years, many of our clients have come from communities such as Memphis, Nashville, Knoxville, Chattanooga, Jonesboro, Little Rock, Jackson, Meridian, Tupelo, Columbus, Grenada, Starkville, Oxford, Hayti, and Caruthersville. For a free consultation with an attorney, call 800-529-4004 or complete our online form. NST is the way to go.