Colonial Penn Life Insurance Company Denies Benefits After Accidental Death (2024)

FAQs

Why would an accidental death claim be denied? ›

Insurers may deny an AD&D claim by basing allegations on weak or nonexistent evidence, or that the death was not accidental. An insurer may refuse to pay benefits when a death caused by an accident does not immediately follow the accident, but takes weeks or months to occur.

A Through Appeal Increases the Chances of Winning Your Claim

Explaining to your insurance company why it made a mistake in denying your claim is the preferred course to take. But when your insurance company will not listen, then filing suit becomes the only alternative.

The insurer might request medical records and other documents to evaluate them for any evidence of material misrepresentation on the life insurance application. If your insurer finds evidence of material misrepresentation, the policy could be voided and your beneficiary would not receive a death benefit.

As the result of a horrific accident, a man in San Jacinto, CA lost his wife. Because her sad and untimely death was accidental, our client filed a claim for accidental death benefits under his wife's life insurance policy. Colonial Penn Life Insurance Company denied the claim for reasons that were objectively untrue.

Accidents that occur while a person is engaged in illegal activities or under the influence of drugs and alcohol will probably not be covered. Similarly, if accidents occur during the practice of a dangerous hobby such as ice fishing or during travel through a war zone, there is a good chance AD&D may not cover them.

Accidental death policy exclusions

Some life insurance policies, known as accidental death policies, only provide coverage for the insured if they die due to an accident. Causes of death related to illness, medical issues or chronic health conditions are not covered.

Life insurance may not pay out if the policy expires, premiums aren't paid, or there are false statements on the application. Other reasons include death from illegal activities, suicide, or homicide, with insurers investigating claims thoroughly.

In some cases, though, your beneficiary might not be able to receive the funds. There are a few reasons why this typically happens: They've died before you or they might refuse the payout, which is called disclaiming the benefit.

But it's important to be aware that there are a few instances where life insurance won't pay out. Top reasons life insurance won't pay out may be because the policyholder lied on their application, their death was the result of suicide, or they passed away during the waiting period.

How often do life insurance companies deny claims? ›

Insurers rarely deny life insurance claims, but it can happen in cases involving excluded causes of death, insurance fraud, or policy lapse. Here's why some claims are rejected and how to appeal the decision.

The Insurance Regulatory and Development Authority of India (IRDAI) mandates insurance companies to settle death claims within 30 days. The guideline applies to all cases where no investigation into the death is required. If there is an investigation, the timeline extends to a maximum of 120 days.

Although Colonial Penn is a stable insurer with an A- financial strength rating from AM Best,* the company received mixed marks in other areas. Part of this is due to limited offerings and a focus on no-exam policies that result in higher policyholder premiums.

Colonial Penn offers two whole life insurance policies. Both policies offer a lump-sum death benefit payout, accumulating cash value the policy owner can access while the insured is still living. As with all policies, the death benefit payout will be reduced if the amount borrowed is not repaid.

In the case of a fatal accident, death usually must occur within a period specified in the policy. Some policies' accidental death benefits may also cover dismemberment—total or partial loss of limbs—burns, instances of paralysis, and other similar cases.

AD&D insurance will cover only deaths and injuries from accidents—not natural causes or illnesses. Not heart attacks or strokes. Policies typically cover death or injuries from accidents at work, home and while traveling.