Delayed life insurance claims.

Insurance companies are obligated to pay claims timely, usually within 30 to 90 days after they receive a valid claim and proof of death.  The exact deadline is set by the laws of each state.  A delayed claim is one where the insurance company hasn't paid a claim within the time limits set by law.  Sometimes the delay is legitimate, and sometimes it's not.  There can be significant penalties if the delay is improper.


Claims can be delayed for many different reasons, but usually it's a paperwork issue.  The company may want to conduct a thorough review of the deceased person's medical history.  This will definitely occur if the insured died within two years of purchasing the policy.  Most policies can't be contested by the insurance company after two years, but if the insurance company can find any material information that was omitted on the life insurance application, it will fight hard to avoid paying claims filed when the insured died within the first two years of the policy's existence. 


Delayed claims can also occur when the insurance company suspects fraud or when there are suspicious circumstances surrounding the death of the insured.  Claims can also be delayed if the beneficiary of the policy is a minor child.  Many well-intentioned parents and grandparents have caused life insurance payouts to be delayed for years by naming small children as beneficiaries.  Unless a parent or guardian goes to court and asks for specific authority to receive the life insurance proceeds on behalf of the minor child, many times these policies won't pay out until the minor child attains the age of majority. 

Delayed claims usually indicate some kind of problem.  Many times the problem is minor, but it can also be serious.  Because insurance companies are required to pay death benefits timely or face penalties, a good lawyer can leverage the potential consequences of delay to speed up the process.

If your life insurance claim has been delayed, you should consider discussing your situation with a qualified attorney to see if you are being treated fairly.  Statistically speaking, the longer a claim is delayed, the less likely it will be paid at all.  Therefore, it is in your interest to see that it is paid as quickly as possible.

Is your claim being delayed? 

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