While a life insurance company provides a necessary service, it still functions as a for-profit business. Thus, the company always keeps its best interests central. As you shop for policies to cover your family, ensure your policy delivers in the event of a premature death.
At Medical Profiles Inc., we created a list of five reasons why people get denied life insurance in Houston, TX. The following information can help you make the right choices when reading through the fine print of any policy.
#1 Issues with Payment
Non-payment causes many families to endure life insurance denial. Non-payment issues occur when you miss payments or are due to system errors. If you keep careful payment records, you can usually avoid this issue.
Sometimes, you might have a non-payment issue if you have group life insurance. For example, your employer might fail to communicate pertinent information to the insurance company. Thus, your family could miss their payout during their time of need.
#2 Misinformation on an Application
When you apply for a life insurance policy, ensure you provide truthful responses to every inquiry. As professionals in the insurance and healthcare industry, we’ve seen this issue all too often. When a person flubbed details or made false claims about their health, their insurance provider refused to pay the beneficiary.
Omitting pertinent details about your health status, hobbies, occupation, and lifestyle leads to your family going without integral financial support. Additionally, always double-check the requested information and the responses you write down.
#3 The Policy Doesn’t Cover Cause of Death
Many policies exclude certain causes of death. Another big reason why people get denied life insurance in Houston, TX, revolves around this issue. Texas law allows insurance companies to exclude certain causes of death including:
- Suicide
- Death caused by alcohol or substance consumption
- Illegal activities
- Dangerous hobbies
- Hazardous occupations
Read through the pertinent clauses surrounding permissible causes of death. Ensure your occupation, hobby, or lifestyle gets coverage before adding your signature.
All too often, a claim was denied because of an accident involving these activities. Unfortunately, this leaves families without much-needed coverage during a period of stress, grief, and upheaval.
#4 Contestability Period
A contestability period lasts around two years after your application’s acceptance. During this period of time, the insurance company can check your information for truthfulness and accuracy in the event of your death. If their investigation finds misinformation, they’ll deny your claim.
Even though a contestability period only lasts two years, the company can still investigate your death after this time. Certain information can still disqualify your payout.
#5 No Applicable Beneficiary Listed
Life insurance policies require beneficiaries to receive the payouts. A beneficiary is a person responsible for obtaining the money. They will use it to manage funeral expenses, hospital bills, and other pertinent financial areas.
Your chosen beneficiary might not have applicable qualifications to receive the benefits at the time of death. This occurs when the listed beneficiary:
- Is a child under the age of 18
- Is an ex-spouse
- Includes multiple family members without specificity
While an insurance company cannot wrongfully deny a legal beneficiary, such situations can cause current or previous beneficiaries to view it as a wrongful denial.
Avoid the Reasons Why People Get Denied Life Insurance in Houston, TX, with a Paramedical Exam
Paramedical exams provide access to a broader range of life insurance options. You can avoid these reasons why people get denied life insurance in Houston, TX, by:
- Reading each policy carefully
- Submitting thorough and truthful applications
- Using paramedical exams for the most accurate reflection of your health
Call our medical professionals at (832) 251-3926 today to schedule your appointment.
