Life Insurance Claim FAQs – Denials, Delays, Interpleader, and Misrepresentation

Life insurance is meant to provide peace of mind for families after the loss of a loved one. Unfortunately, many beneficiaries run into problems when filing a claim. Claims may be denied, delayed, or disputed for a variety of reasons. Some families even face interpleader lawsuits where multiple people are fighting for the same benefits. Understanding how life insurance works – and what to do if there’s an issue – can help protect your rights.

At the Law Offices of Jason Turchin, we handle life insurance disputes throughout Florida, New York, New Jersey, and nationwide with local co-counsel. This FAQ hub answers some of the most common questions beneficiaries ask. If you need immediate help, call us at 800-337-7755 or use our live chat for a free consultation. You won’t pay any fees or costs unless we win or settle your case.

Frequently Asked Questions About Life Insurance Claims

1. What should I do if my life insurance claim is denied?

First, read the denial letter carefully. Insurance companies are required to give a reason for denial. Common reasons include alleged misrepresentation, lapse in premiums, or exclusions in the policy. You may appeal internally with the insurer, but many families choose to contact a life insurance attorney to fight the denial. A lawyer can review the denial, request documents, and, if necessary, file a lawsuit.

2. Why do life insurance companies delay payments?

Delays often occur when insurers claim they need additional documentation, are reviewing the policy, or are investigating the cause of death. In some cases, delays may be a tactic to avoid payment. If your claim has been delayed for months, it may be time to get legal help to push the process forward.

3. What is an interpleader lawsuit in life insurance?

An interpleader happens when a life insurance company cannot determine the rightful beneficiary. Instead of paying one person, the insurer deposits the money with a federal court and lets the court decide. Common interpleader situations involve disputes between former spouses, current spouses, or children. An attorney can represent your interests in an interpleader case.

4. Can a life insurance company deny a claim for misrepresentation?

Yes, insurers often deny claims if they believe the policyholder misrepresented information on the application, such as failing to disclose medical conditions. However, not every alleged misrepresentation is valid. Florida and many states have rules limiting how and when insurers can deny coverage for misrepresentation.

5. How long do I have to file a life insurance claim in Florida?

Most insurers require beneficiaries to file claims within a reasonable time, but the statute of limitations for filing a lawsuit varies by state. In Florida, beneficiaries typically have five years to file a lawsuit for breach of contract. Acting quickly helps preserve evidence and speeds up recovery.

6. What happens if multiple people claim the same policy?

If multiple beneficiaries make competing claims, the insurance company may hold the funds until the dispute is resolved. This may lead to an interpleader lawsuit in federal court. Each claimant will often have the opportunity to argue why they are entitled to the proceeds.

7. Can a former spouse collect life insurance benefits?

It depends. If the former spouse was never removed from the policy after a divorce, they may still have a legal right to the benefits. Some states, like Florida, automatically revoke a former spouse as a beneficiary unless the policyholder reaffirmed the designation after the divorce. However, contracts, state, or federal law may impact this.

8. How does ERISA affect employer-provided life insurance claims?

Employer-provided life insurance often falls under federal law known as ERISA. These cases must usually be handled in federal court and follow specific appeal procedures. Deadlines for appealing a denial under ERISA are often short, so it is important to act quickly.

9. Can I sue a life insurance company for bad faith?

Yes. If an insurer denies a claim without a valid reason, delays payment without justification, or otherwise violates its duties, you may be able to file a bad faith lawsuit. This type of claim may allow for additional damages beyond the policy value.

10. What damages may be recovered in a life insurance lawsuit?

The primary recovery is the value of the policy. In cases of bad faith, beneficiaries may also recover interest, attorney’s fees, and in some states, additional damages for wrongful denial.

11. Can life insurance be denied if the policyholder died within two years of purchase?

Most policies have a “contestability period,” usually two years. If the policyholder dies during this time, the insurer can investigate the application for misrepresentations. If they find discrepancies, they may try to deny the claim.

12. What if the policy lapsed for non-payment of premiums?

If premiums weren’t paid, the policy may lapse. However, insurers must follow strict rules about sending lapse notices. In some cases, beneficiaries may challenge the lapse if the insurer failed to provide proper notice or if the insured had a disability waiver of premium.

13. How long does it take to get paid on a life insurance claim?

Simple claims can be paid within 30 to 60 days. Disputed claims may take months or even years if they go into litigation. An attorney can often try to speed up the process by pressuring the insurance company or filing suit if necessary.

14. What if the insurance company claims suicide as the cause of death?

Most policies exclude suicide within the first two years. If the insurer denies based on suicide after that period, the denial may be improper. An attorney can help challenge the denial and investigate the actual cause of death.

15. Do I need a lawyer for a life insurance claim?

Not always, but if your claim is denied, delayed, or disputed, having an attorney can make a big difference. Life insurance companies have teams of lawyers on their side. Having someone represent your interests may level the playing field.

Contact the Law Offices of Jason Turchin

If you are facing a denied or delayed life insurance claim, or are involved in an interpleader lawsuit, the Law Offices of Jason Turchin may be able to help. Call us today at 800-337-7755 or chat with us online for a free consultation. You won’t pay any fees or costs unless we win or settle your case.