Life Insurance Policy Exclusions and Denied Claims in Pennsylvania

A life insurance company may deny a claim based on an exclusion contained in the policy. However, the existence of an exclusion does not necessarily mean that an insurer has properly denied the beneficiary's claim.

Whether an exclusion applies depends on the specific language of the life insurance policy and the circumstances surrounding the insured's death. When significant policy benefits are at stake, beneficiaries should carefully review both the policy and the insurer's stated reason for denying payment.

What Is a Life Insurance Policy Exclusion?

A life insurance exclusion is a provision identifying circumstances in which the policy does not provide coverage.

When an insurer relies on an exclusion to deny death benefits, important questions can include:

• What does the policy actually say?

• Does the exclusion apply to the particular circumstances of the death?

• What evidence supports the insurer's conclusion?

• Is there a factual dispute concerning the cause or circumstances of death?

• Has the insurer interpreted the policy language correctly?

A beneficiary should not assume that the insurance company's interpretation of an exclusion is necessarily the final word.

Suicide Exclusions in Life Insurance Policies

Life insurance policies commonly contain provisions addressing suicide during a specified period after the policy becomes effective.

A suicide provision should be distinguished from the policy's contestability provisions. Although both issues frequently arise during the early years of a policy, they involve different questions.

A contestability investigation may focus on statements made in the insurance application and whether the insurer believes information concerning medical history, medications, smoking, substance use, or other underwriting considerations was inaccurate or incomplete.

A suicide exclusion, by contrast, concerns the circumstances surrounding the insured's death and the particular language of the policy.

When an insurer relies upon suicide to deny benefits, the policy language, effective date of coverage, medical evidence, death certificate, investigative records, and circumstances surrounding the death may all require review.

Drug, Alcohol, and Substance-Related Deaths

Claims involving alcohol, illegal drugs, or prescription medications can result in complicated coverage disputes.

The presence of a substance in a toxicology report does not by itself answer every coverage question. The relevant inquiry depends upon the policy language, cause of death, toxicology evidence, and surrounding circumstances.

Issues may arise involving:

• Illegal drugs

• Prescription medications

• Alleged misuse of prescription medication

• Alcohol intoxication

• Accidental overdose

• Multiple substances contributing to death

An insurer's denial should be compared carefully with the actual exclusion or other policy provision upon which it relies.

Death During Allegedly Illegal Activity

Some life insurance policies contain exclusions relating to criminal or illegal conduct.

These cases can present difficult factual and contractual questions. An insurer may contend that an exclusion applies because the insured was allegedly engaged in unlawful conduct when the death occurred.

Potential disputes may involve:

• DUI-related accidents

• Illegal drug activity

• Alleged criminal conduct

• Other violations of law occurring near the time of death

The critical question is not simply whether some unlawful conduct allegedly occurred. The wording of the particular exclusion and its relationship to the circumstances of the death must be examined.

An arrest, police investigation, or allegation of criminal conduct should not automatically be treated as establishing that a life insurance exclusion applies.

Homicide and Beneficiary Disputes

A homicide can create additional complications in a life insurance claim, particularly when a beneficiary is suspected of involvement in the insured's death.

Pennsylvania law can prevent a person who intentionally and unlawfully kills another from benefiting financially from that death. As a result, an insurer may delay payment while law enforcement investigates the circumstances of a homicide or while competing claims to the proceeds are resolved.

These cases may involve questions concerning:

• Whether the named beneficiary is suspected of involvement

• Whether criminal charges were filed

• Whether the beneficiary has been cleared

• Whether contingent or alternate beneficiaries exist

• Whether competing parties claim entitlement to the proceeds

In some circumstances, an insurer may seek court involvement to determine who is legally entitled to receive the policy benefits.

Hazardous or High-Risk Activity Exclusions

Some policies contain exclusions or limitations concerning particular activities or risks.

Depending upon the policy, these may involve activities such as:

• Aviation

• Racing

• Scuba diving

• Mountaineering

• Certain extreme sports

• Other specifically identified hazardous activities

When an insurer relies on such a provision, the precise language matters. Questions may include whether the activity was actually excluded, whether the insured disclosed the activity during the application process, and whether the circumstances of death fall within the provision relied upon by the insurer.

War, Military Service, and Similar Exclusions

Certain life insurance policies may contain exclusions relating to war, military activity, insurrection, or similar events.

These claims can require particularly careful analysis because policy language varies and the circumstances surrounding an overseas or military-related death may be complicated.

A beneficiary facing a denial based on a war or military-related exclusion should review the actual policy provision rather than relying solely upon the insurance company's characterization of the event.

Why the Exact Policy Language Matters

Life insurance coverage disputes are fundamentally contractual.

Two policies issued by different companies may contain very different language addressing what appears to be the same situation. Even policies issued by the same insurer may differ depending upon when the policy was issued and the type of coverage purchased.

For that reason, an exclusion-based denial should be evaluated using the actual policy issued to the insured, not merely a general description of the insurer's practices.

Relevant documents may include:

• The complete life insurance policy

• The insurance application

• Amendments, riders, and endorsements

• The denial letter

• The death certificate

• Medical and toxicology records

• Police or investigative reports

• Correspondence between the beneficiary and insurer

Can a Life Insurance Denial Based on an Exclusion Be Challenged?

Potentially.

An insurer's reliance on a policy exclusion does not necessarily establish that the denial is correct. A dispute may exist concerning the meaning of the policy language, the underlying facts, the cause of death, or whether the exclusion applies to those facts.

Depending upon the circumstances, a beneficiary may be able to challenge the denial and seek payment of the life insurance death benefit.

Some disputes can be resolved through further documentation or negotiations with the insurer. Others may require litigation to determine whether benefits are payable under the policy.

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.