Life insurance companies are not required to accept a claim at face value. When a claim triggers concern based on timing, circumstances, or inconsistencies adjusters may initiate a deeper investigation. While policies are designed to provide financial protection, insurers have financial incentives to scrutinize claims they perceive as high-risk or irregular.
Understanding the criteria adjusters use to flag claims as suspicious helps explain why valid claims are often delayed or denied. These internal reviews often serve as the foundation for contestability challenges, exclusions, or litigation.
Timing of the Death
One of the first factors that triggers scrutiny is the timing of the death in relation to the policy's issuance. If the insured dies within the first two years, the claim falls within the contestability period. Adjusters are trained to examine applications closely during this window to identify any inconsistencies or omissions that could justify denial.
Even after the contestability period, a death that occurs shortly after reinstating a lapsed policy or increasing coverage may prompt a similar review.
Cause of Death
Adjusters examine whether the cause of death might fall under an exclusion. These can include:
- Suicide within the exclusion period
- Drug or alcohol-related deaths
- Death during the commission of a felony
- Deaths related to extreme sports or travel
- Deaths resulting from self-inflicted injury or high-risk behavior
Medical records, autopsy reports, and toxicology results are reviewed to determine whether an exclusion could apply. If the cause of death is unclear, adjusters may request further documentation or delay the claim pending additional investigation.
Inconsistencies in the Application
Adjusters compare the original application against medical records and public databases. If the decedent failed to disclose a prior medical condition, prescription, or history of treatment, the company may allege material misrepresentation.
Even if the omitted condition had no connection to the cause of death, the insurer may attempt to void the policy by claiming it would not have been issued had full disclosure occurred. These reviews are particularly aggressive during the contestability period.
Beneficiary Designation Changes
If a beneficiary was changed shortly before the insured’s death, or if the new beneficiary is unrelated to the insured, this may prompt additional scrutiny. Adjusters will examine the legitimacy of the change, the insured’s capacity at the time, and whether any undue influence may have occurred.
Common red flags include:
- Changes made under a power of attorney
- Changes made after a serious medical diagnosis
- Conflicting designations on multiple forms
- Changes involving a caregiver, recent acquaintance, or non-family member
Foreign Deaths
When an insured dies outside the United States, adjusters often investigate the validity of foreign death certificates and circumstances surrounding the death. They may require embassy confirmation, secondary proof of death, or extended documentation. These claims are frequently delayed and sometimes denied based on document authentication concerns.
Lapsed Coverage or Missed Premiums
If a claim is filed after a policy has lapsed or entered a grace period, adjusters will examine whether the insured was eligible for reinstatement or if the policy was in force at the time of death. In group policies, this often involves reviewing employment records, waiver of premium requests, or employer communications.
Multiple or Large Claims
Claims involving multiple concurrent policies, large benefit amounts, or recent changes in coverage are often flagged for financial review. Adjusters may investigate whether the insured was overinsured, or whether the policies were purchased as part of a scheme to provide a windfall to certain beneficiaries.
Conclusion
Life insurance adjusters are trained to identify patterns and circumstances that raise questions about the validity or payout eligibility of a claim. While their investigations can prevent fraud, they also create barriers for legitimate beneficiaries. Many denials or delays are based on issues uncovered during these internal reviews, often leading to disputes that require legal resolution. Knowing what adjusters look for is the first step in understanding why a claim may be questioned and what can be done to protect the right to receive benefits. To learn more about life insurance disputes visit The Lassen Law Firm website.
