Legal Lens: Avoiding insurance claim confusion

Legal Lens

The Brown & Crouppen Legal Lens takes a closer look at everyday legal issues and gives you a better understanding of topics that may affect you.

ST. LOUIS – Last week on Legal Lens, we covered understanding what’s in your life insurance policy. This week, we’re taking it a step further.

There are people who aren’t getting life insurance policies paid out because of the COVID pandemic.

“People think they know what they have with their life insurance policy, then COVID hits, they experience a tragedy, and find out they were not covered,” Brown & Crouppen attorney Andrea McNairy said.

Although McNairy has seen social media posts alleging insurance companies denying claims, she said she’s found very few substantiated instances of that happening. But that number isn’t zero, meaning it is happening in limited cases.

“There’s two reasons we are seeing denials: one is definitional exclusion and two is material misrepresentation,” McNairy said.

What should someone do if they’ve lost a loved one and they’re in this exact situation now? McNairy says everyone needs to read their policy and be up to date on what it covers.

“When I talk about definitional exclusion, I’m talking about parts of your policy; what is covered and what isn’t,” she said. “Usually they are termed exclusions, but if you see an exclusion in your policy that says, ‘Act of GOD, infectious disease or pandemic,’ and it excludes those items, then you know you need to change your coverage. Or find a new life insurance company.”

What about material misrepresentation?

“I’m talking about maybe you forgot to disclose a comorbidity that an insurance company can argue during the contestability period that it effected your ability to fight off the COVID virus, resulting in death,” McNairy said. “So, I would be honest about all health conditions.”

Just because McNairy didn’t find a lot of health insurance claims being denied doesn’t mean it’s not happening.

“I did find substantiated circumstances of this happening,” she said. “It leads back to what we discussed last week, which is make sure you’re reviewing your policy. And make sure it fits your needs at the time.”

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