People may be interested in buying life Insurance in North Huntingdon PA but want some questions answered first. For instance, they may have heard about situations in which the company refused to pay the beneficiary after the policyholder passed away. That leaves families reeling when they counted on the life insurance money to pay for funeral costs or other expenses. What reasons do life insurance companies have for denying claims?
Lapse in Coverage
The most common reason is that the policyholder let the coverage lapse by not paying the premium. This is especially likely with term coverage. This is a short-term policy that must be renewed repeatedly, similar to the way car insurance works. Many people choose this type of policy because it is significantly cheaper than whole life policies that build savings over time.
Dishonesty
Not being honest when filling out the application is another reason insurers deny claims. Policies for Life Insurance in North Huntingdon PA have a two-year window in which the claim can be contested if the policyholder passes away that soon. The insurance company wants to be sure the person didn’t take out a policy because he or she was diagnosed with a serious medical condition, for instance.
That is an extreme example, of course. Insurers look for other evidence that the person lied on the application, and they can deny the claim even if the dishonesty was not related to the death. To illustrate, the applicant may have stated he or she does not smoke tobacco. In reality, this person might not have been a regular smoker, but might have indulged in cigar smoking on the weekends. If the insurance company finds out about this, the claim may be denied.
Exclusions
Policies also have exclusions that the applicant must understand. One example would be excluding death resulting from the policyholder’s criminal activity.
When choosing a life insurance policy, independent agents with an organization like E.F. Barrett Agency Inc. can answer any questions and help customers avoid the possibility of claim denial. Nearly all claims are paid without question, so the policyholder just has to follow a few simple guidelines to make sure nothing goes amiss.
