Demystifying Insurance After Death of Policy Holder

Episode No. 9:

What Happens if the Cause of Death Is Disputed?

When a life insurance claim is filed after the policyholder’s death, the insurer expects clear documentation, including the cause of death. However, if the cause of death is disputed or unclear, it can complicate the claim process. Understanding what happens in such cases can help policyholders and their families prepare and avoid delays. Here’s a simple explanation of what happens when the cause of death is disputed.

A dispute over the cause of death often arises when the information provided, such as the death certificate, is vague, incomplete, or contradicted by other evidence. For example, if the death certificate lists an unclear cause like “natural causes” or if there’s a question about whether the death was due to an accident, illness, or excluded event (like suicide or risky activities), the insurer may investigate further. This is especially common during the contestability period, typically the first two years of the policy, when insurers closely review claims.

When a dispute occurs, the insurance company will launch an investigation to verify the cause of death. This may involve requesting additional documents, such as medical records, autopsy reports, or police reports in case of an accident or suspicious death. The insurer may also interview family members, doctors, or witnesses to gather more details. This process can take weeks or even months, delaying the payout of the death benefit.

If the investigation finds that the cause of death falls under a policy exclusion such as suicide within the first two years or death during illegal activities then the claim may be denied. For instance, if the insurer suspects the death was related to an undisclosed health condition or a risky hobby not mentioned in the application, they may reject the claim based on misrepresentation. However, if the dispute is resolved and the cause of death is covered under the policy terms, the insurer will process the claim and pay the benefit.

To avoid disputes, policyholders should be honest about their health and lifestyle when applying for insurance, ensure their policy is active by paying premiums on time, and inform their family about the policy details. Keeping clear records, like medical history and policy documents, can also help. If a claim is denied due to a disputed cause, beneficiaries can appeal the decision or seek legal advice.

In short, a disputed cause of death triggers an investigation, which may delay or deny a claim. Transparency, proper documentation, and understanding policy terms can ensure a smoother process for your loved ones.

Save & share this with someone who needs to hear it