If you or your loved one purchased life insurance through an employer, the Policy is likely governed by the Employee Retirement Income Security Act (ERISA). ERISA is a specialized area of the law. Specific and strict rules will govern your efforts to secure payment of the death benefits and one misstep could mean that the death benefits are forever lost.
The Typical Scenario: The beneficiary of a life insurance policy files a claim after the death of their loved one. The insurance company requests additional documentation and information. Ultimately, the life insurance company sends a letter denying the claim for one or more reasons. The denial letter indicates that the denial can be appealed within a certain timeframe (typically 180 days). If the deadline is missed, the ability to pursue life insurance proceeds will likely be lost forever. Some beneficiaries forget to file an appeal, some file it incorrectly, and others choose not to file an appeal because they are intimidated or believe that the insurance company will not reverse its decision.
It is essential to consider that the life insurance company does not have the beneficiary’s best interest in mind. Rather, the company seeks to maximize profits and deny claims if at all possible. Meanwhile, beneficiaries are likely not experienced with life insurance law and not in a position to know whether the claim denial was legitimate. Our firm has successfully convinced many life insurance company’s to reverse their decision. Candidly, sometimes it seems as if the life insurance company’s are betting that the beneficiaries will not be able to located skilled counsel in this niche area.
The Dangers of Filing your Own Appeal: Beneficiaries who file their own appeal are navigating a minefield. Life insurance law is complicated and ever-changing. Many beneficiaries will not be able to formulate their best arguments.
Even more concerning is that ERISA law provides a very deferential standard to most life insurance companies. The Court will only consider what information the life insurance company had at the time it decided the appeal and will only overturn the life insurance company’s decision if it was “arbitrary and capricious.” That standard is favorable to the insurance company so the beneficiary has a high hurdle to overcome.
Additionally, because the Court will only consider the merits of the decision given the information at the hands of the insurance company at the time the appeal was decided, it is essential that the beneficiary put forth the entirety of their evidence, and their best arguments, at the time of appeal. There will not be an opportunity to do so later, and an attorney can likely not remedy mistakes once they have been committed at the appeal stage.
Conclusion: Your loved one faithfully paid life insurance premiums out of their paycheck every month – often for many years. It is an injustice if their desire to provide for their loved ones posthumously is jeopardized by careless handling of an ERISA appeal. As such, it is important to locate a highly experienced life insurance attorney as soon as possible upon claim denial.
