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Was Your Life Insurance Claim Denied Due to Lapse?

If there was a lapse in coverage, your claim will be denied. But don’t take no for an answer!

Our life insurance attorneys have gotten many clients paid on lapsed policies. Lapse is one of the most common reasons a life insurance claim is denied, however, in many instances we can get the claim denial reversed if we show that the lapse was not the fault of the insured.

Contact us to speak with a life insurance claim lawyer about your claim and find out whether the life insurance company should pay your claim on the lapsed policy. We only take cases on a contingent basis, meaning we do not get paid unless you do, so you have nothing to lose.

How to Get Paid on a Lapsed Life Insurance Policy

Life insurance is a highly regulated industry. Life insurance companies must follow strict procedures when an insured’s premium is late or premiums have not been paid for some time, and the policy lapsed or was terminated. Sometimes they don’t.

The laws that control payment lapse or termination for non-payment of premiums are updated frequently, requiring life insurance companies to update their contracts and procedures. Often they fail to do so, or fail to do so in a timely fashion, and a policy will fall through the cracks.

Frequently, our life insurance lawyers have shown that the life insurance company failed to follow the law and improperly cancelled the life insurance policy. In the case of lapse of employer-provided group life insurance, our life insurance attorneys have shown that the administrator of the group life insurance plan failed to follow the law. In these cases, the beneficiary can be paid despite the lapse in coverage.

Our life insurance attorneys thoroughly investigate each case of lapse to determine whether the lapse was not the fault of the insured. Here are instances where we’ve gotten our clients paid on a lapsed insurance policy.

If the Policy Lapsed Because the Insured Did Not Receive Notice, the Beneficiary May Be Paid

If the insured never received notice of the lapse, or received inadequate notice under the law, you may get the death benefits paid under certain circumstances.

Case Study:  where the insured fell into a comatose state and the family never received notice that premiums were past due, only notice of lapse and termination, we were able to get the beneficiary paid.

If you are the beneficiary of a lapsed life insurance policy, you should obtain copies of any notices sent to the insured and contact our experienced life insurance lawyers to evaluate whether your claim can be paid despite the non-payment of premiums.

If the Insured Died During the Policy’s Grace Period, the Beneficiary May Be Paid

The policy documents will set forth the applicable grace period following non-payment of premiums. If the insured dies within this period, the policy is still in effect and the beneficiaries will be paid the death benefit.

In the case of death during the grace period, our life insurance lawyers can likely get your claim paid. We will need to know the date of death and the date of the insured’s last premium payment. We will also need any notices sent to the insured, if available.

If the Policy Lapsed Because the Insured’s Premium Payment was Lost or Delayed, the Beneficiary May Be Paid

If a premium payment was lost or delayed through no fault of the insured and the policy lapsed, the beneficiaries still may be paid.

This often happens when the insured is in the hospital or assisted living and no longer in control of their finances. In these cases, our life insurance attorneys will investigate whether the insured or the insured’s power of attorney received the required notices regarding non-payment.

If the Policy Lapsed Because the Life Insurance Company Failed to Properly Calculate or Apply Flexible or Vanishing Life Insurance Premium Payments, the Beneficiary May Be Paid

Some life insurance policies offer the option of varying premiums payments. While this may be convenient for the insured, it opens the door to administrative error on the part of the life insurance company. If the policy lapses due to this administrative error, the beneficiaries can get paid.

If the Policy Lapsed Because the Insured’s Employer Mismanaged the Group Life Insurance Plan, the Beneficiary May Be Paid

Unfortunately, this is common. Because insurance law is complex and many employers attempt to administer their group life insurance plan lawfully but fail, policies lapse and are terminated through no fault of the insured. In these cases, the policy will pay out.

If you are the beneficiary of an employer-provided group life insurance policy, contact our life insurance lawyers for your free case evaluation. We will investigate and determine whether the employer failed to provide an application for conversion to private life insurance, failed to provide an application for life insurance premium waiver for disability, or failed to send the required notices, whether the employer stopped paying the premiums unlawfully.

If the Policy has a Non-Forfeiture Clause, the Beneficiary May Be Paid Despite Lapse

Some insurance policies include a non-forfeiture clause, which means that if the insured stopped paying premiums, their beneficiary will still receive some of the benefit.

You can think of this as a lapsed policy refund. If coverage lapses, the insurance company will refund part of the premium payments and/or pay the policy’s cash value.

With some policies, coverage will not lapse in case of non-payment. Instead, the policy will remain in place but with a reduced death benefit calculated as a percentage of the premiums that were paid.

What is Lapse in Life Insurance?

When someone buys a life insurance policy, the life insurance company’s obligation to pay out to their beneficiaries is contingent upon whether the insured paid their premiums. A lapse in coverage will occur if the insured fails to pay their premiums. If the policy lapses, the life insurance company will not pay the insured’s beneficiaries.

Call Our Life Insurance Lawyers if Your Claim Was Denied Due to Lapse

If your life insurance claim was denied due to a missed payment, reach out to the life insurance lawyers at Boonswang Law. We will determine whether you can be paid!

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.

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