We’d all like to believe that our insurance company will see the legitimacy of our claim and immediate pay out the benefits, particularly a life insurance claim. Even when your policy language plainly shows that you are entitled to life insurance benefits, though, the insurance company will sometimes try to delay paying out benefits.
How Can my Insurance Company Delay Paying My Benefits?
What typically happens is the insurance company will deny a claim and hope the claimant won’t pursue the case any further. Basically, the insurance company is hoping you will give up instead of hiring a lawyer and filing an appeal.
The appeal processes can take a long time. In 2018, we worked on a case where the insurance company kept denying the appeal, even though a judge agreed that insurance company did NOT do a full and fair review and told them to try again.
In this case, the insurance company has delayed payments for over three years, avoiding paying out $600,000 even though the client appears to be fully entitled to life insurance benefits.
Can I Sue My Insurance Company for “Bad Faith?”
For ERISA regulated life insurance policies, there is no way to sue the insurance company for bad faith. If the policy is NOT ERISA regulated, it may be possible to sue for bad faith. Even when suing for bad faith is possible, it is very difficult because of how the law is written.
ERISA is a specific type of insurance law with very different rules. In general, ERISA laws favor the insurance companies. You should ALWAYS consult with an experienced ERISA attorney before attempting to appeal a claim yourself.
Will the Insurance Company Have to Pay Interest on Back Benefits?
No. ERISA insurance policies do not have to pay you interest on back benefits (sometimes judges can award interest, but by the time you get to a judge your appeal has been denied and the process may have taken years). The insurance company will never have to pay bad faith awards, pain and suffering, or punitive damages. Just what they owed you in the first place. That’s the law.
Insurance companies are motivated by profit, like all businesses. However, unlike most businesses, insurance companies will sometimes use the legal system to delay payments for as long as possible.
Why would insurance companies withhold payments if they know they will pay out those benefits anyway? It’s simple Economics 101 for them – since they are not punished for delaying claims, they can use YOUR benefit award to make investments and grow their company. The interest they earn on YOUR benefits award is pure profit for the insurance company.
How Can I Get My Benefit Payments from the Insurance Company?
If the insurance company is denying your claim even though you think you meet the criteria in your plan’s policy, you should consult an attorney. ERISA is a complex area of law, and few attorneys have the expertise to navigate these claims successfully.
Contact BenGlassLaw at (703) 584-7277. If you have an insurance company denial letter, we will review it for free and let you know what we recommend. If you need other advice, schedule a paid consultation to review your policy, your claim, your options and more. Sometimes that’s all you need, and if we do end up working on an appeal for you, we will credit the consultation fee to the cost of an appeal.It’s a numbers game to the insurance company, but to you it’s your life and financial security. Let us help.