Frequently Asked Questions About Denied Life Insurance Claims in Pennsylvania

When a loved one passes away, life insurance benefits are often intended to provide financial security during an already difficult time. Unfortunately, some beneficiaries discover that the insurance company has denied their claim, delayed payment, or attempted to rescind the policy altogether.

A denied life insurance claim does not necessarily mean that the insurance company's decision is legally justified. In Pennsylvania, beneficiaries may have grounds to challenge a denial and recover benefits that should have been paid under the policy.

At Sklarosky Law, we help individuals and families evaluate denied life insurance claims throughout Wilkes-Barre, Hazleton, Luzerne County, and Northeastern Pennsylvania.

Below are answers to frequently asked questions about life insurance claim denials and the legal rights of beneficiaries.

1. Why Do Life Insurance Companies Deny Claims?

Life insurance companies may deny claims for several reasons, including:

• Material misrepresentations: The insurer alleges that the insured provided inaccurate or incomplete information on the application.

• Preexisting medical conditions: The company claims that the insured failed to disclose a medical diagnosis or treatment.

• Policy lapse: The insurer contends that the policy terminated because premiums were not paid.

• Suicide exclusions: The company relies on a policy provision limiting coverage for suicide during a specified period.

• Contestability investigations: The insurer reviews the accuracy of the original application following a death within the contestability period.

• Policy exclusions: The company asserts that the circumstances of death fall within an exclusion.

• Beneficiary disputes: Multiple individuals claim entitlement to the policy proceeds.

Although these are common explanations for denied claims, an insurance company's stated reason does not automatically establish that the denial is valid.

The policy language, application, medical records, applicable law, and circumstances surrounding the insured's death must all be considered.

2. Can I Fight a Denied Life Insurance Claim in Pennsylvania?

Yes. A denied life insurance claim can often be challenged.

An insurance company's decision is not necessarily final simply because it sends a denial letter.

Depending on the circumstances, beneficiaries may challenge a denial by demonstrating that:

• The insurer misinterpreted the policy.

• The alleged misrepresentation was not legally sufficient to justify rescission.

• The policy remained in effect when the insured died.

• An exclusion does not apply.

• The insurer failed to comply with applicable policy provisions or legal requirements.

• The denial was made without a reasonable basis.

An attorney can review the denial letter, insurance policy, and supporting documentation to determine whether the insurer's position can be challenged.

3. What Should I Do If My Life Insurance Claim Is Denied?

If a life insurance company denies your claim, there are several important steps you should consider taking.

First, request the denial in writing. The insurer should identify the basis for refusing payment.

Second, obtain a complete copy of the policy. The policy's terms, exclusions, riders, and amendments may determine whether the denial is justified.

Third, preserve all communications. Keep letters, emails, claim forms, payment records, and other correspondence.

Fourth, avoid making unnecessary statements or signing releases. Statements or agreements may affect your ability to challenge the insurer's decision.

Finally, consult an attorney familiar with life insurance disputes. Legal review may identify weaknesses in the insurer's position that are not apparent from the denial letter.

You should also pay attention to any appeal deadlines or contractual limitations periods identified in the policy.

4. Can a Life Insurance Company Deny a Claim Because of a Preexisting Medical Condition?

A preexisting medical condition does not automatically permit an insurance company to deny life insurance benefits.

Insurers sometimes allege that the deceased failed to disclose conditions such as:

• Heart disease

• Diabetes

• Cancer

• High blood pressure

• Mental health conditions

• Previous hospitalizations or medical treatment

Whether the insurer can successfully deny benefits depends on the application questions, the insured's responses, the alleged misrepresentation, the policy, and applicable Pennsylvania law.

For example, an insurer may argue that it would not have issued the policy, or would have issued it under different terms, if certain medical information had been disclosed.

However, the insurer must establish a legally sufficient basis for its decision. A medical condition appearing in the insured's records does not, by itself, establish that the policy can be rescinded.

5. What Is the Two-Year Contestability Period for Life Insurance?

Many life insurance policies contain a two-year contestability provision.

During the contestability period, an insurer may investigate the application and seek to challenge coverage based on qualifying misrepresentations or other legally recognized grounds.

For example, if an insured dies 14 months after purchasing a policy, the insurer may review medical records and compare them with the original application.

However, the contestability period does not give insurance companies unlimited authority to deny claims.

Pennsylvania law, including 40 P.S. § 510(c), contains requirements concerning incontestability provisions in covered life insurance policies. The precise application of these rules depends on the type of policy and circumstances.

Once a policy becomes incontestable, an insurer's ability to challenge its validity may be substantially restricted, subject to applicable exceptions and policy provisions.

6. Can a Life Insurance Company Deny a Claim After Two Years?

In certain circumstances, yes. However, the insurer's legal grounds for doing so may be more limited.

An incontestability provision generally restricts challenges to the validity of a policy after the applicable period has expired.

That does not necessarily eliminate disputes concerning whether coverage was in force, whether a particular benefit applies, or whether a valid policy exclusion affects the claim.

Beneficiaries should not assume that a denial is lawful simply because the insurer identifies an exclusion or claims that the insured provided inaccurate information.

7. What Happens If the Life Insurance Policy Lapsed Before Death?

Life insurance companies sometimes deny claims by asserting that the insured failed to pay premiums and that coverage terminated before death.

However, the issue may be more complicated than whether a payment was missed.

Important questions include:

• Was the premium actually overdue?

• Did the policy contain a grace period?

• Did the insurer comply with applicable notice requirements?

• Were payments submitted but incorrectly processed?

• Did automatic premium loans or other policy provisions preserve coverage?

• Was the policy properly terminated?

A lapse-based denial should be evaluated against the actual policy language, premium history, and applicable law.

8. Can Life Insurance Be Denied Because of Suicide?

Life insurance policies may contain suicide exclusions, often applicable during an initial period following issuance.

Under Pennsylvania law, the enforceability and application of a suicide exclusion depend on the governing policy and applicable statutory requirements.

If an insurer invokes a suicide exclusion, important issues may include the date the policy became effective, the wording of the exclusion, and the evidence concerning the insured's death.

A death classified as suicide does not necessarily mean that every life insurance policy benefit is automatically forfeited.

Beneficiaries should have the policy reviewed before accepting a denial based on suicide.

9. Can Life Insurance Be Denied Because of Drug or Alcohol Use?

Some life insurance policies contain exclusions involving intoxication, drug use, or particular circumstances surrounding death.

However, not every death involving alcohol or drugs permits an insurer to deny benefits.

The insurer must identify an applicable contractual or legal basis for withholding payment.

For example, the mere presence of a substance in a toxicology report does not necessarily establish that an exclusion applies.

The specific wording of the policy, the type of coverage, and the circumstances of death are critical.

10. What If the Insurance Company Claims the Deceased Lied on the Application?

One of the most common reasons for a denied life insurance claim is an allegation of material misrepresentation.

The insurer may claim that the insured failed to disclose:

• A medical diagnosis

• Prescription medications

• Tobacco use

• Prior medical treatment

• A hazardous occupation or activity

• Other information requested on the application

Under Pennsylvania law, the insurer's ability to avoid coverage based on application statements depends on the applicable legal standards and the facts of the case.

An inaccurate answer does not automatically establish intentional deception or justify rescission.

For example, an applicant may have misunderstood a question, relied on information provided by an insurance agent, or answered based on what the applicant reasonably knew at the time.

These circumstances may be important when challenging the denial.

11. Can I Sue a Life Insurance Company for Denying a Claim?

Yes. Depending on the circumstances, a beneficiary may be able to bring a lawsuit to recover unpaid life insurance benefits.

Potential legal claims may include:

Breach of Contract: If an insurer improperly refuses to pay benefits owed under the policy, the beneficiary may seek recovery of the contractual death benefit.

Insurance Bad Faith: Pennsylvania's insurance bad-faith statute, 42 Pa.C.S. § 8371, may provide additional remedies when an insurer acts in bad faith in handling or denying a covered insurance claim.

However, a denial does not automatically constitute bad faith. The available claims and remedies depend on the facts and applicable law.

12. Can I Recover More Than the Life Insurance Policy Amount?

Potentially.

In a successful breach-of-contract action, the beneficiary may recover benefits owed under the policy, together with other relief available under applicable law.

If statutory insurance bad faith is established under 42 Pa.C.S. § 8371, a court may award additional relief, including:

• Interest as provided by the statute

• Punitive damages

• Court costs

• Attorney's fees

These remedies are not automatic and depend on proof of the statutory requirements.

13. How Long Does a Life Insurance Company Have to Pay a Claim in Pennsylvania?

There is no single payment deadline that applies identically to every life insurance claim.

The applicable timeline may depend on Pennsylvania insurance law, policy provisions, whether the insurer has received satisfactory proof of death, and whether a legitimate coverage investigation is necessary.

Some claims are paid relatively quickly, while others are delayed by investigations into medical history, beneficiary designations, exclusions, or policy validity.

An extended investigation does not necessarily establish wrongdoing, but an insurer cannot use an investigation as an unlimited justification for unreasonable delay.

14. How Long Do I Have to Sue for a Denied Life Insurance Claim?

The deadline depends on the legal claim, policy language, and applicable law.

In Pennsylvania, breach-of-contract claims are generally subject to a four-year statute of limitations under 42 Pa.C.S. § 5525, although accrual rules and contractual limitations may affect the deadline.

Claims for statutory insurance bad faith under 42 Pa.C.S. § 8371 generally have a two-year limitations period.

Because different deadlines may apply to different claims arising from the same denial, beneficiaries should seek legal advice promptly rather than relying on the insurer's internal appeal process to protect their rights.

15. Do I Have to Appeal the Denial Before Filing a Lawsuit?

Not necessarily.

Whether an internal appeal is required depends on the type of policy, governing law, and applicable administrative procedures.

For example, certain employer-provided life insurance policies are governed by the federal Employee Retirement Income Security Act (ERISA). These plans may have administrative appeal and exhaustion requirements that differ significantly from those governing individually purchased policies.

Failing to comply with an applicable ERISA appeal deadline may jeopardize a beneficiary's rights.

Before submitting an appeal or filing a lawsuit, it is important to determine which legal framework governs the policy.

16. What If the Life Insurance Policy Was Provided Through an Employer?

Employer-provided life insurance coverage may be governed by ERISA, a federal law regulating many employee benefit plans.

ERISA can significantly affect:

• How a denied claim must be appealed

• What evidence can be submitted

• When a lawsuit may be filed

• Which court may hear the dispute

• What damages and remedies are available

Importantly, Pennsylvania's insurance bad-faith remedies may be unavailable for certain ERISA-governed claims because of federal preemption.

An attorney should determine whether ERISA applies before recommending a course of action.

17. Can a Life Insurance Company Offer Less Than the Full Policy Amount?

Yes, insurers sometimes dispute the amount payable or propose settlements for less than the stated death benefit.

However, beneficiaries are not automatically required to accept a reduced offer.

Before agreeing to a settlement, it is important to determine whether the insurer has a legitimate basis for disputing coverage or the amount owed.

A settlement may be appropriate in some circumstances, but beneficiaries should understand the potential value of their claim and the rights they may be releasing.

18. How Much Does It Cost to Hire a Lawyer for a Denied Life Insurance Claim?

Attorney's fees depend on the nature of the dispute, the amount of insurance involved, and the fee arrangement.

Some attorneys handle qualifying denied life insurance claims on a contingency-fee basis, meaning attorney's fees are generally tied to a successful recovery, subject to the terms of the written agreement.

At Sklarosky Law, we can review the circumstances of a denied claim and discuss the potential legal options and applicable fee arrangements.

19. What Documents Should I Have Before Contacting an Attorney?

If possible, gather the following documents:

• The insurer's denial letter

• The life insurance policy and any riders

• The original insurance application, if available

• The death certificate

• Correspondence with the insurance company

• Premium payment records

• Any medical records the insurer identified as the basis for denial

• Employer benefit documents, if the policy was obtained through employment

Do not delay contacting an attorney simply because you do not have every document. Additional records may be obtainable during the claim investigation or litigation.

20. Do I Need a Pennsylvania Lawyer to Challenge a Denied Life Insurance Claim?

A Pennsylvania attorney may be particularly helpful when the claim involves a Pennsylvania resident, a policy governed by Pennsylvania law, or litigation in Pennsylvania state or federal court.

Life insurance disputes can involve complex questions concerning contract interpretation, insurance regulations, federal law, and the applicable statute of limitations.

Having an attorney evaluate these issues early can help beneficiaries avoid procedural mistakes and determine whether litigation is warranted.

Areas Served

Sklarosky Law represents clients in denied life insurance claims throughout Pennsylvania, including the following communities:

• Luzerne County: including Wilkes-Barre, Hazleton and surrounding communities
• Lackawanna County: including Scranton, Clarks Summit and surrounding communities
• Columbia County: including Bloomsburg, Berwick and surrounding communities
• Carbon County: including Jim Thorpe, Lehighton and surrounding communities
• Monroe County: including Stroudsburg, East Stroudsburg and surrounding communities
• Wyoming County: including Tunkhannock and surrounding communities

If your claim occurred elsewhere in Pennsylvania, contact Sklarosky Law to discuss whether the firm can assist with you.

Contact a Pennsylvania Denied Life Insurance Claim Lawyer

If a life insurance company has denied benefits based upon a policy exclusion, it is important to understand the exact provision being relied upon and the evidence the insurer believes supports its decision.

Based in Luzerne County, Sklarosky Law evaluates significant life insurance disputes throughout Northeastern Pennsylvania and across Pennsylvania, including claims involving policy exclusions, contestability investigations, alleged misrepresentations, rescission, policy lapse, and beneficiary disputes.

Call (570) 283-1200 or use our online contact form to schedule a confidential consultation today to discuss a denied or disputed life insurance claim.