Our life insurance lawyers in South Carolina handle delayed and denied life insurance claims, AD&D claims, beneficiary disputes and South Carolina interpleader lawsuits.
Fraud or forgery in the context of life insurance can lead to a denied claim if the insurance company detects such misconduct during its investigation. Here are several ways in which fraud or forgery can result in a denied life insurance claim:
False Information on the Application: When applying for a life insurance policy, applicants are required to provide accurate and complete information about their health, medical history, lifestyle, and other relevant factors. Deliberate misrepresentation or withholding of critical information can lead to a denied claim if the insurance company discovers the fraud. Examples include lying about pre-existing medical conditions, smoking habits, or risky hobbies.
Fabricated Documents: Submitting fake or altered documents in support of a life insurance claim can result in denial. This may include falsified medical records, death certificates, or beneficiary designations.
Identity Theft: If a fraudulent party takes out a life insurance policy using another person’s identity without their knowledge or consent, and that person later dies, the insurance company may deny the claim once the identity theft is discovered.
Beneficiary Fraud: If the beneficiary of a life insurance policy is involved in fraudulent activities, such as causing or being complicit in the insured’s death, the insurance company may investigate and deny the claim.
Premium Payment Fraud: If policyholders engage in fraud related to premium payments, such as submitting false payment receipts or trying to reinstate a lapsed policy through deceitful means, it can result in a denied claim.
Policy Alteration or Forgery: Altering the terms of a life insurance policy, including beneficiary designations, without the knowledge or consent of the policyholder can lead to a denied claim. Forging the policyholder’s signature on policy documents can also result in a claim denial.
Contestability Period Investigation: Most life insurance policies have a contestability period (typically the first two years) during which the insurance company has the right to investigate and potentially deny a claim if they find material misrepresentations or fraud on the policy application.
Non-Disclosure of Material Information: Besides beneficiary-related misrepresentations, policyholders are required to disclose material information about their health, medical history, and lifestyle. Failure to do so can lead to a denied claim if the insurance company discovers significant omissions or false information.
Staged Deaths: In extreme cases, individuals may attempt to fake their own deaths or stage accidents to collect life insurance benefits. If such fraud is uncovered, the claim will be denied.
Criminal Activity: If the insured’s death is a result of criminal activity, and the beneficiary is involved or has knowledge of the illegal actions, the insurance company may deny the claim.
It’s important to emphasize that insurance companies have dedicated fraud investigation units and resources to detect and prevent fraud and forgery. Engaging in fraudulent activities can have serious legal consequences, including denial of the claim, cancellation of the policy, and potential criminal charges. Policyholders and beneficiaries should always act with honesty and transparency throughout the insurance process to ensure that benefits are paid out as intended.