Life insurance companies should pay the full amount of a claim upon presentation of a valid death certificate. It really should be as simple as that. However, as many beneficiaries find out, that’s not always the case and some insurers use tactics that he describes as despicable.

Despicable tactics

Bob Scott, a California attorney and partner with the Advocate Law Group, has seen it all over the past 25 plus years of practicing in this area of the law. He described one tactic that life insurance companies use to avoid paying the full value of claims that he describes simply as despicable. He explained:

I’ve heard of despicable situations in which a claims person will call a beneficiary who is entitled to a $250,000 payout and say, “We’ve got some sort of a problem with the payout, but if you’ll accept $100,000 instead, we can pay that out right away.” It’s outrageous. The company should either pay all of it or none of it – there’s no in-between. That’s bad faith.

Fighting despicable tactics

Some lawyers’ practices focus specifically on life insurance matters and can fight these types of tactics on behalf of beneficiaries, because like Scott, they know how insurance companies operate. He explained:

This is its own legal specialty. In the same way that you wouldn’t see a knee doctor to do surgery on your wrist, the same applies with life insurance attorneys. If you don’t hire a lawyer that knows what they’re doing in life insurance claims, or any insurance claims for that matter, the insurance company will know it. They’ll obtain the lawyer’s resume so they know who they’re up against. If it’s not someone with life insurance experience, they’ll run right over you.

Asking the right questions

It’s important for consumers to be informed about the attorney they’re hiring. Scott says that consumers should, “Ask the attorney how many other cases he’s had like this and what the outcomes were. Those are legitimate questions and if you don’t ask, you’re literally hiring somebody blind that could put you in even a worse circumstance than you were the minute before you hired him – even with a good case.”

Possible damages,

While the possible damages in any case depend on what state a lawsuit is filed, Scott says that plaintiffs could potentially receive attorneys’ fees, or at least a part of them, as well as any consequential losses. He clarified, “By that, I am referring to any losses you incurred because you didn’t receive the life insurance benefits on time. It could also represent fees you had to pay because you had to take money out of your T-bills because you didn’t get the life insurance proceeds on time and had to pay bills. There are many potential situations concerning consequential damages. You could also receive damages from emotional distress and potentially for punitive damages in many states if the insurer’s conduct was outrageous.”

“However, it’s impossible to know exactly what types of damages are available until an attorney looks at the file. I think the important thing to realize is that there are many types of damages that could be available to you if an insurance, life insurance, disability or credit disability insurance company has made an unreasonable or inappropriate claims decision.”

If your insurance company hasn’t paid your valid life insurance benefits, they may have acted in bad faith. To contact a qualified attorney whose practice focuses in this area of the law, please click here. Consultations are free, without obligation and are strictly confidential.