Everybody is always telling you that there are many benefits to investing in life insurance, not only for your own future but for the future of your loved ones.
Life insurance plans become one more aspect that we grasp onto so that we can lead the best future possible, which is why every person on this planet should consider a plan that works for them.
There are many reasons why more and more people are investing in life insurance:
- To protect loved ones after you pass away so that your children can still be supported by an “income” and sustain their standard of living
- To leave an inheritance that you can pass onto heirs when you make them your beneficiaries
- To pay off debts once you have passed away, like those on your mortgage, credit cards, and types of loans
- To add financial security for your children, who may want to continue their education through college or start a business
There are many reasons why life insurance policies might be for you, and why it helps to have this security to add a little extra peace of mind. However, sometimes when it is time to pay out, life insurance companies don’t always do as they’re supposed to. We put all of our trust into these companies who promise to take care of our loved ones when we are no longer here to do so. Unfortunately, things do not always go as planned and sometimes bad faith occurs.
When Life Insurance Bad Faith Occurs
You’ve purchased an individual policy and you expect it to protect your rights and your loved ones in the event that you pass away.
There are many ways that insurance companies act in bad faith every year in the United States.
When an insurance company denies you and refuses to pay valid claims, you or your loved ones could have a case and might be able to recover for aspects like emotional distress, punitive damages, and more. Here are some of the ways that life insurance companies act in bad faith:
Rescinding the Policy: Sometimes an insurance company will look for ways to cancel or rescind a policy instead of investigating the many ways to approve a claim.
Unreasonable Delays: The insurer starts making an investigation into a claim, but will take a long period of time to do so. They might hold off on approving the claim at first so that they can request proof of death, payments, medical history information, and more. A life insurance company has to act within a reasonable amount of time, but who dictates what is reasonable and what isn’t? If a delay seems unreasonable because it’s taking too long, the insurance company might be acting in bad faith.
Misrepresentations: When the policy is first given to someone, the insurance tells them one thing. However, when the person with the policy passes away, misrepresentation occurs and the insurance company starts to pick and choose what is part of the policy and what isn’t.
Offering Too Little: You know what you are owed when it comes to a life insurance policy. Unfortunately, many companies will attempt to give you too little and you will be paid way less than what you were supposed to be. For instance, the policy might be worth hundreds of thousands of dollars, but the company only offers you half of that and can’t give you a good reason as to why this is.
Threatening Statements: Perhaps an insurance company has threatened you because you both spoke about your policy and how you believe you are not getting a fair amount. They should never make threatening statements and, if they do, it’s time to speak to your attorney.
No Reason Given: If a company denies a claim without a reason, you may have a bad faith claim. There should always be a reason for the denial no matter what. Perhaps you believe that it was due to an invalid reason as well, which could also lead to bad faith.
No Investigation: When it comes to your life insurance claim, a company is always supposed to complete an investigation on time. If the company says that they are not going to investigate your claim or you believe that it was not conducted properly, bad faith might have occurred.
When it comes to life insurance claims, you also see many policyholders rejected due to pre-existing conditions. The life insurance company might make a claim that the policyholder, while still living, failed to notify them of a pre-existing condition even if this is not true. This often constitutes bad faith, because it is a common tactic used in cases for a life insurance company to unfairly deny benefits. Sometimes life insurance companies will sit and pick at little details so that they can twist them to benefit them in the long run and deny a claim, leaving a family with virtually no options. You don’t want this to happen to you, which is why you should speak with an attorney immediately.
How We Can Help
As long as you have been paying your premiums and everything is going smoothly, you shouldn’t have to worry about how your loved ones obtain compensation after your death.
However, too many people become victims of their life insurance companies every year in the U.S. when a company decides that they are not going to pay out a claim even though there is no good reason for this.
It is important to understand bad faith insurance claims from start to finish so that you can pick up on the cues and get the compensation you deserve in your case.
We help policyholders in every way to make sure that an insurance company never takes advantage of you when it comes to these very important aspects of your life.
At the McGuire Law Firm, we are here for you in every way and want to help you with your claim. Give us a call today to get started at (405) 513-5658.