When an insurance company rescinds a life insurance policy, it does not do so quietly. It will provide a reason, and that reason will often sound definitive. However, the justifications an insurer cites for voiding a policy are not always legally sound, and they deserve careful scrutiny.
At Sasser Law Firm, our skilled life insurance rescission attorneys have decades of experience helping clients resolve life insurance disputes, and we know how to challenge an insurer’s stated reasons for rescission of a life insurance policy in Charlotte. We will support you through every stage of this process and fight for the outcome your family deserves. Contact us today to get started.
In Charlotte, the most common reason insurers cite for rescission of a life insurance policy is alleged material misrepresentation on the original application. This means the insurer claims that the policyholder provided false or incomplete information when applying for coverage and that it would not have issued the policy, or would have issued it on different terms, had it known the truth. Common examples of alleged misrepresentation include claims that you failed to disclose a pre-existing medical condition, claims that you provided inaccurate information about your occupation or your income, and claims that you failed to disclose certain undesirable lifestyle habits such as tobacco use or participation in high-risk activities.
Most life insurance policies include a contestability period, typically spanning the first one to two years of coverage, during which an insurer has the right to investigate the application and pursue rescission. However, depending on timing, insurers sometimes have a direct financial motivation to rescind rather than pay a large death benefit. A rescission allows the company to return premiums and withdraw from a claim entirely, leading insurers to characterize minor or irrelevant application details as material misrepresentations when the facts do not support that characterization.
Our attorneys have experience evaluating these claims and understand what the legal standard for materiality actually requires. We can examine the insurer’s stated reason thoroughly and determine whether it would withstand a legal challenge.
Not every justification an insurer offers for terminating a life insurance policy in Charlotte will survive serious legal scrutiny. There are several circumstances in which the insurer’s position is far weaker than it may initially appear.
First, there is a meaningful legal distinction between an innocent or inadvertent error on an application and intentional fraud. Insurers aggressively pursue many rescissions even when there is no evidence that the policyholder deliberately misled the insurer. Second, brokers or agents acting on behalf of the policyholders, rather than the policyholder directly, sometimes make errors on applications.
Third, even when an undisclosed condition existed, the insurer must show that it was material to the risk. In some cases, an undisclosed condition had no bearing whatsoever on the cause of death.
Insurers can also go too far procedurally. If a company attempts to rescind a policy outside the contestability window or fails to follow state insurance regulations in how it conducts the rescission, the action may be invalid regardless of the underlying reason it cites.
Sasser Law Firm is a boutique practice, meaning our attorneys will give your case the focused, hands-on attention it deserves and invest fully in your outcome. We will build a thorough counterargument against the insurer’s stated reason and pursue every available path to recover the benefits it owes to your family.
Insurers count on beneficiaries and policyholders accepting their stated reasons without question, but you have the power to act. An insurer’s reasons for rescission of a life insurance policy in Charlotte are often vulnerable to challenge, and having the right legal representation can make all the difference.
Sasser Law Firm brings decades of courtroom and negotiation experience to every life insurance dispute we handle. Contact us today to schedule a consultation and let us evaluate the insurer’s position on your behalf.
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