In the State of Mississippi, the owners and beneficiaries of life insurance policies expect claims to be paid in a prompt and reasonable manner. Unfortunately, life insurance claims are denied, delayed, or disputed for a number of different reasons. These reasons can range from a life insurance company denying the claim due to an alleged misrepresentation in the application to another person challenging a beneficiary designation. At MyInsuranceCase, we understand that your claim is important. We help people across the State of Mississippi recover the life insurance payouts that were promised.
Common Types of Life Insurance Disputes in Mississippi
Life insurance claims can become troublesome in several different ways. On the one hand, life insurance companies are looking for reasons to deny or even delay claims. The most common reasons that a life insurance claim is denied include misrepresentations in the policy application, the cause of death is excluded under the policy, and nonpayment of premiums.
Multiple people sometimes make a claim to a singular life insurance payout. In these situations, someone often claims that the named beneficiary is not entitled to payment. There are numerous reasons why a beneficiary will be challenged. Some of the more common reasons why a beneficiary is challenged include:
- Lack of capacity to change the beneficiary.
- Fraud or forgery of beneficiary designation form.
- Undue influence on policy owner.
- Failure to properly designate a beneficiary.
- Breach of divorce agreement.
- Subsequent will or other writing changing beneficiary.
These are only a few examples of how a life insurance beneficiary can be challenged.
Important Legal Protections in Mississippi
Mississippi regulates the conduct of life insurance companies that issue policies within the state. Title 83 of the Mississippi Code is the state-based law regulating insurance companies including life insurers. While the terms of policy tend to dictate your legal obligations and rights, the Mississippi Insurance Department also takes an active role in regulating the conduct of insurance companies doing business in the state.
Several of the more important legal protections provided to Mississippians include:
1. Contestability Period
Most life insurance policies permit a life insurance company to cancel or rescind a policy if there was a material misrepresentation or error in the policy application. Mississippi Code 83-9-5 states that life insurance companies generally cannot cancel a policy after it has been in force for two years as long as you continue to pay your premiums. Within two years of issuance of the policy, however, the company may review the application and conduct an investigation to determine if the application contained any errors. The most common type of review is into the applicant’s health background. If the investigation reveals that the application contained material misrepresentations, errors, or omissions, the life insurance company may elect to rescind (void) the life insurance policy.
2. Prompt Payment Requirements
One key element of insurance law is that the law requires that claims be promptly. In Mississippi, the legislature has enacted Code 83-9-5(h)(1) that provides specific timelines for an insurance claim to be paid. Once a complete claim has been submitted, the insurance company has between 25- and 35-days to pay the claim depending on if it was submitted electronically or on paper. Normally, these deadlines commence when the insurance company has received proof that the claimant is the valid beneficiary to the policy. Failure to pay the claim promptly can result in an interest penalty of 18% per year plus attorney’s fees. While an insurance company is not obligated to pay a claim that is legitimately disputed, the insurance company must employ effective procedures to adjust, handle, and pay claims promptly.
3. Insurance Bad Faith
Mississippi law requires insurance companies to act in good faith to their insureds. When an insurance company acts in bad faith, it may be sued for damages above the limits in the policy. What constitutes “bad faith” is often hotly debated. In Mississippi, an insurance company acts in bad faith when it delays, denies, or underpays an insurance claim without reasonable excuse. Some of examples of bad faith include:
- Denying a claim for a frivolous or unjustifiable reason.
- Delays, denials, or significant underpayments due to improper investigation of the claim.
- Failure to employ qualified experts to investigate the claim.
- Failure to create sufficient policies or procedures to adjust claims.
- Failing to promptly pay claims.
In Mississippi, there are two different levels of damages that may be recovered for bad faith. The first involves claims the insurance company had no arguable basis for breaching the insurance policy. In that situation, you can recover consequential damages, which include any provable financial loss and general damages for anxiety and mental anguish. In addition, you can also recover attorney’s fees and case costs.
If you prove that the insurance company acted with malice or gross disregard, you can recover consequential damages, punitives damages, and attorney’s fees.
Get Legal Help If Your Claim Has Been Denied or Delayed
A denied or delayed life insurance claim can be frustrating and a source of significant anxiety. Life insurance claims are often denied when the person whose life is insured dies within the two-year contestability period. Insurance companies will often conduct a thorough review of the applicant’s medical history to create a rationale for denying the claim. Denials due to misrepresentations are often very contentious. In many cases, the insurance company’s denial is not proper and the beneficiary should fight back.
Other common reasons for denial is for non-payment of an insurance premium and determining that a person is not the proper beneficiary.
It is important to keep in mind that a denied claim often results in significant profits to an insurance company. In addition, the reasons for denial are often not clear cut. Close attention needs to be placed on the reason for denial, the policy, the policy application, and the evidence the insurance company claims supports its decision. Thorough vetting of the evidence often shows that the insurance company did not have an adequate basis to deny the claim.
Get Legal Help With Disputed Claims
There are numerous reasons why multiple people can make a claim to a life insurance death benefit resulting in a contested claim. You may learn that multiple beneficiary forms had been created or that the policyowner had entered into an agreement to make someone else the beneficiary. There may be questions surrounding a person’s mental capacity to designate someone as the beneficiary. Some people may make claim to the policy based on the promise they would be a beneficiary. Some policies involve complex issues concerning ownership and the right to designate a beneficiary. Other times, state law may have forfeited a certain person’s interest in the policy.
The attorneys at MyInsuranceCase have experience assisting claimants with disputed claims. This includes representing the named beneficiary as well as people seeking to initiate a contested claim. We gain a clear understanding of the disputed issues and create a strategy to present the strongest claim possible.
In many cases, contested claims end up in a legal process called interpleader. An interpleader means that the life insurance company has agreed that it owes the policy payout but does not know with reasonable certainty who is the correct beneficiary. In these cases, the claimants are forced to bring their claims in court. We have had significant success representing claimants in interpleader actions.
If you have a life insurance claim that has been denied or if you feel your insurance company is not treating you fairly, do not give up. Give us a call and schedule a free consultation where we can assess your case. We have decades of experience in life insurance cases and are licensed in Mississippi.