Few things are more painful than learning that a life insurance policy supposedly lapsed shortly before a loved one died. Insurers sometimes deny these claims by saying premiums were not paid on time. Before accepting that conclusion, beneficiaries should look closely at how the policy ended.
Grace periods
Many life policies include a grace period after a missed premium, often around 30 or 31 days, during which coverage stays in force. If the insured died during the grace period, the policy may still pay, usually minus the unpaid premium. The exact length and terms depend on the policy and the law that applies to it.
Notice and payment problems
Insurers generally must follow the policy's procedures, and in some cases statutory requirements, before treating a policy as lapsed. Questions worth asking include whether proper written notice of the missed payment was sent, whether automatic bank drafts failed because of a bank or insurer error, and whether the insurer accepted a late payment that could be treated as keeping the policy alive.
Reinstatement
Some lapsed policies can be reinstated if the insured applied and paid within a set period, often with proof of insurability. A reinstatement that was pending or processed when the insured died can create real disputes.
Gather these documents
The policy and any riders
Premium payment records and bank statements
Every notice from the insurer or agent
Emails and call notes about payment or reinstatement
A lapse denial often looks final but turns on small details. A careful review of the payment history and the notices can show whether the insurer followed its own rules.
Davila Cobos Law Firm, PLLC represents clients in San Antonio and Laredo. Learn more about our life insurance claim denial lawyer services, or contact the firm to discuss your situation.
This article is general information, not legal advice, and reading it does not create an attorney-client relationship. Every situation is different, so talk to a Texas attorney about yours.
