Has Your Life Insurance Policy Been Rescinded?

Has Your Life Insurance Policy Been Rescinded?

Find out from the experienced life insurance lawyers at Boonswang Law how a life insurance policy gets rescinded, and what to do if you are a beneficiary of a rescinded life insurance policy.

If your claim for death benefits was denied because the life insurance company rescinded the policy, do not take no for an answer–call us. We will fight to get you the death benefits you deserve–at no up-front cost to you!

Rescinded Policy – a Common Reason for Claim Denial

A rescission notice is somewhat different than an outright claim denial, lapse, or termination. A life insurance company alleges it has cause to rescind coverage for material misrepresentation when the insured makes a false statement, error, or omission on their initial application for life insurance and medical questionnaire, that the insurance company relied upon when writing and issuing the policy.

The insurance adjusters use the information the insured submits on their application and medical questionnaire to determine the risk that the insured will die within the policy term. If the insured is at high risk of dying within the policy term, they pay higher premiums than those at lower risk.

The life insurance company will allege that it relied upon the false statement, error, or omission in issuing life insurance coverage, and rescind the policy. A rescission notice essentially goes back in time to the day life insurance coverage started and the policy is null and void.

In the rescission notice, the life insurance company must offer to return all premiums paid.

What Should You Do if You Get a Rescission Notice?

Your rescission notice should clearly state the reason or reasons they are rescinding your policy. Know that a life insurance policy cannot be rescinded if:

  • The alleged false statement, error, or omission is immaterial, or in other words, trivial, such as a minor mistake in an applicant’s contact information.
  • The insured did not know about a medical condition at the time the application and medical questionnaire were completed.
  • The insured did not have the intent to deceive.
  • The question the life insurance company alleges was falsely answered was vague or a compound question

If you get a rescission notice and you believe the reason the life insurance company rescinded your policy is incorrect or does not apply, contact your life insurance company immediately. A simple mistake on your part or their part can usually be rectified without further problem. However, if the life insurance company insists on rescinding your policy, you can contact a life insurance attorney for help. If you want the recission to stand, you should insist on a refund of all premiums you paid.

What Should You Do if You Are a Beneficiary of a Rescinded Life Insurance Policy?

If the insured dies within the first two years of coverage, called the Contestability Period, the life insurance company will investigate all of the facts the insured provided in their application and medical questionnaire. If they find any false statements, errors, or omissions, however trivial, they will rescind the policy and deny beneficiaries’ claims for death benefits.

Most errors and omissions are innocent. The life insurance company must show that the error or omission was done with the intent to deceive the underwriter and pay lower premiums. We have been able to help many clients across the nation get death benefits paid on rescinded life insurance policies because there was no intent to deceive on the part of the insured.

A beneficiary’s case is even stronger when the alleged misrepresentation had nothing to do with the insured’s cause of death, i.e., is immaterial. But even if it does, we have been able to settle with life insurance companies and get our clients paid the death benefit minus what the insured would have paid in premiums had the alleged misrepresentation not occurred.

Rescinded Policy? Call the Life Insurance Lawyers at Boonswang Law for Help

More often than not, policies are unfairly rescinded for any mistake or omission the insured made, even if the insurance agent who completed the application made the mistake, not the insured.

If your claim was denied because the life insurance company rescinded the policy, call us. We have helped many life insurance beneficiaries get a payout on a rescinded life insurance policy, and we can help you too. Call us at 1-215-940-8900 for your free, no-obligation consultation.

Written By: Chad Boonswang
Chad G. Boonswang, Esquire is a litigation lawyer based in Philadelphia, PA. Selected as an ASLA 2014, 2015, 2016, 2017 and 2018 Top 100 Litigation Lawyer, Mr. Boonswang plays to win. As a lawyer, athlete, and scholar, he has always put in the energy, time, and commitment to be the best. After working for several prominent law firms in Philadelphia, including Montgomery McCracken Walker & Rhoads LLP, he founded his own practice in 2002.  Since then Chad has recovered tens of millions of dollars on behalf of his clients from life insurance claims and catastrophic injury cases.  Year after year, he has earned a 10.00 Superb rating on Avvo.

Not Getting Paid Your Life Insurance Benefits?

Talk to a life insurance lawyer at no cost.