When you purchase a life insurance policy, you have every reason to believe that the insurer reviewed your application carefully before agreeing to provide coverage. In practice, some insurers do not conduct a thorough review until the filing of a claim, which is a practice known as post-claim underwriting. At that point, the insurer scrutinizes the original application and looks for any reason to deny the claim or rescind the policy entirely.
At The Sasser Law Firm, our dedicated life insurance attorneys understand how damaging post-claim underwriting in Charlotte life insurance policies can be, especially during a time when families are already grieving a loss. We are ready to use our decades of experience to fight for your rights. Contact us today to get the support you need.
Standard underwriting is the process by which an insurer evaluates an applicant’s risk profile before agreeing to issue a policy. This should happen at the beginning of the relationship, before the collection of any premiums.
Post-claim underwriting in life insurance policies turns that process around. Instead of conducting a meaningful review upfront, the insurer accepts premium payments for months or even years. Then, only after the filing of a claim, the insurer begins investigating the original application in search of misrepresentations or omissions that could void the policy or deny the claim.
This practice is particularly harmful to beneficiaries. A policyholder who pays premiums consistently and in good faith has every reason to believe they have protection in place for their family. However, when that person dies, and the insurer responds by launching a retroactive investigation, the family is left to fight for life insurance benefits in Charlotte at the most vulnerable point in their lives.
The financial motivation behind post-claim underwriting is straightforward, as it allows an insurer to collect premiums without taking on meaningful risk. Then, they can use the claims process itself as the screening mechanism. Thankfully, insurers who engage in this practice do not always have the legal standing they assume they do.
Families facing post-claim underwriting in Charlotte are not without options, and the insurer’s position is often weaker than it appears. There are several strong grounds on which you can challenge this practice.
An insurer that accepted premiums for an extended period without raising any concerns about the application may have waived its right to rescind the policy. Courts have found in several cases that an insurer cannot collect years of premiums, remain silent about any application concerns, and then use those same concerns to void a policy when the filing of a claim occurs.
The state’s insurance regulations and the federal Employee Retirement Income Security Act of 1974 (ERISA) protections (for employer-sponsored group policies) both impose requirements on how insurers handle claims and disputes. When an insurer failed to follow required procedures or acted outside the contestability period, those failures can form the basis of a strong challenge.
The legal standard of materiality applies here as well. Whatever issue the insurer identifies through its post-claim investigation must rise to the level of a material misrepresentation, meaning it must have genuinely influenced the decision to issue the policy. Minor errors and conditions unrelated to the cause of death frequently fail to meet that standard. The distinction between an innocent mistake and deliberate fraud is also legally significant and one that insurers do not always respect in pursuing these challenges.
At The Sasser Law Firm, we handle post-claim underwriting disputes from the initial appeal through every level of litigation, including appellate courts. We build a thorough and well-supported challenge to the insurer’s position and pursue every available path to recovery on your behalf.
Post-claim underwriting in Charlotte life insurance policies is a practice that puts families at a serious disadvantage, but it is not a practice you have to accept without a fight. If you believe an insurer used post-claim underwriting to unfairly deny a claim or rescind a policy, one of our attorneys at The Sasser Law Firm can help you understand your available options during an initial consultation.
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