Can You Sue For Life Insurance Proceeds?
Can you sue for life insurance proceeds? Generally, you can’t sue for life insurance proceeds. Find out why here.
People buy a life insurance policy just because they want their loved ones to be financially covered after they are gone.
One of the most important things to do in the life insurance process as a policyholder is to name your beneficiary.
The beneficiary will be the person who receives the payout when the insured dies.
Usually, the main beneficiary gets paid by the insurance company if everything is in order. But sometimes, it’s not as easy as it seems.
Disagreement from former spouses, children, or other relatives who think they should get the life insurance money may challenge the named beneficiary after the policyholder dies.
So, can you sue for life insurance proceeds?
Anyone can legally fight a life insurance policy if they believe they’re the rightful beneficiary and have a valid reason to start a dispute.
It’s not easy to remove an already named beneficiary from a life insurance policy, except that the court intervenes.
Life insurance death benefit claim lawyers Brisbane are experienced insurance dispute lawyers.
In this article, you’ll learn the life insurance process and whether you can sue to recover the proceeds.
What Does Life Insurance Cover?
Life insurance is meant to give a payout, usually a large sum of money, to the people you choose, like your kids, spouse, or other family members, after you pass away.
As we’ve said, it helps make sure your loved ones are financially secure and can cover funeral costs, unpaid medical bills, and everyday living expenses in the future.
Life insurance usually covers:
- Natural causes like heart attack, cancer, infection, kidney failure, stroke, or old age
- Accidents that cause death, such as car crashes, falls, or machinery accidents
- Illnesses like Parkinson’s, Alzheimer’s, certain cancers, stroke, heart attack, or multiple sclerosis
- Murder (in most cases)
- Suicide (often covered after two years, though this can vary by state and policy)
A claim can be denied if the policyholder lied on their application or took part in risky activities.
It can also be denied if the policy expired or if the beneficiary caused the policyholder’s death.
That’s why it’s important to read your policy’s terms carefully so you know what’s covered.
The policyholder should also make things simple for the beneficiaries so there’s no confusion when it’s time to receive the payout.
Who is Eligible to Receive Life Insurance Proceeds?
Life insurance is a legal agreement that pays money to the person or people listed as beneficiaries in the policy, not in a will.
This is something many people misunderstand.
When the policyholder dies, the beneficiary must file a claim to get the payout. It’s not automatic.
Most insurance companies will ask for a claim form, a copy of the policy, and an official death certificate.
A policy can have one or several beneficiaries. These beneficiaries can’t be organizations like charities, trusts, or businesses.
If the main beneficiary has passed away, the insurance company will pay the backup, known as the contingent beneficiary.
Sometimes, someone who isn’t named as a beneficiary can start the life insurance beneficiary disputes regarding payout if any of these happen:
- A former spouse is still listed after a divorce.
- The policyholder tried to change the beneficiary but didn’t finish the process.
- The policyholder’s mental health was questionable when they named the beneficiary.
- The life insurance form wasn’t filled out correctly, or it’s invalid.
- The policy was set up through fraud, pressure, or threats.
- The beneficiary caused the policyholder’s death.
In most cases, there are no rules about how the payout can be spent.
Life insurance beneficiaries can use the money for anything they like, whether living costs, funeral expenses, education, retirement, travel, or other needs.
What Can You Do When Your Life Insurance Proceeds Are Denied?
Life insurance companies don’t always keep their promises.
When they purposely find ways to deny a payout so they can save money, it’s called bad faith.
It’s not always easy to tell if a claim denial is fair or if it’s bad faith.
That’s why death benefit claim lawyers Brisbane are needed to contest a life insurance claim denial.
They can review your case, figure out if the denial was reasonable, and, if not, fight to get you the money you’re owed.
If an insurer is acting in bad faith, they need to be held accountable. A life insurance claims dispute lawyer might help you by:
- Gathering proof that the company was careless in handling your claim or didn’t investigate it fully.
- Showing there was no fair reason to deny your claim.
- Proving that the insurer twisted the terms of your policy or gave false information.
- Collecting evidence that the insurance contract was broken.
- Filing a lawsuit for dishonest or unethical practices.
Many people hire life insurance claim lawyers Brisbane law firm because of these unfair and unethical insurance practices.
Should You Sue Your Insurance Company for Denied Life Insurance Proceeds?
As we’ve been mentioning in this post, life insurance policies help to reduce the financial stress after a loved one dies.
But what’s going to happen when your claim is denied and the rejection stops you and prevents a payout?
Insurance companies will use different strategies to not pay you the right amount or totally deny it.
You may need to get legal assistance because of these bad-faith practices.
Filing a lawsuit is one option for policyholders, and you can decide whether to sue your insurance company by taking these steps:
- Read your policy and paperwork carefully, including the contestability period and common reasons the insurer uses to delay or deny claims.
- Keep detailed records of all communication with the company, like emails, letters, denial notices, and appeal documents.
- Collect evidence such as written exchanges with the insurer or its agents.
- Get legal advice from an experienced life insurance lawyer to check if your claim is valid, look into other ways to settle the issue, and make sure you meet the statute of limitations.
If you believe you’re owed life insurance money but can’t get your claim approved, talk to a skilled insurance dispute firm that handles death benefit compensation Brisbane.
They can review the case, gather evidence, and handle all talks and negotiations with the insurance company and their lawyers, so you don’t have to.
Conclusion
Insurance disputes are not usually a nice experience, especially when death and grief are involved.
It is already a difficult time for everyone involved, and the last thing you want to do is go through the stress of fighting big life insurance companies.
Things have changed now. You don’t have to fight; you can hire a professional insurance lawyer to represent you.
