Important person life insurance (aka key man life insurance policy or corporate owned life insurance) is life insurance policy coverage on top executives, directors, partners, proprietors and key employees in a corporation.

The proceeds from a key man life insurance coverage are paid directly to the organization that took out there the policy, since the business is the named beneficiary under the key man life insurance policy.

Loss of life of a key person in a corporation often causes a loss of income, business and opportunities. It may cause significant business expenditures associated with hiring and training a new employee replacement.

Not surprisingly, having key man insurance plan on highest paid officers and director is a regular procedure for many companies that numerous investors now expect.

Since the very essence of key man life insurance coverage is to safeguard corporations from financial deficits in the event of death of your executive, it is reasonable to expect the insurance company to honor a key man insurance coverage claim after it issues a policy and collects premiums from a corporation.

However, insurance providers regularly deny key man life insurance claims and do not pay for a variety of reasons.

The most frequent reasons for denying or delaying key man life insurance policy claims are contestable promises, putting on policy exclusions, break of policy provisions and fraud.

Fortunately, almost every state has laws designed to protect corporations from the insurance company’s refusal to pay a key man insurance coverage claim and an experienced key man life insurance lawyer can help a corporation determine whether its claim has recently been wrongfully denied or late and whether it can be recovered in court.

Contestability provision
Contestability is 1 of the most typical reasons insurance firms use to delay and deny claims.

A contestable claim is a claim filed after the policy has been in result for less than two years. The contestability supply is not unique to key man insurance coverage guidelines; it is found in nearly every life insurance deal.

Under this provision, if a key person in a corporation (insured) drops dead within the first two years after the date the business purchased the policy on him/her, the insurance company has the right to investigate the insured’s medical history, background and other personal information disclosed on the application.

If it finds out that some information was misrepresented or not disclosed, a key man life insurance claim will most likely be refused.

Not all claims are wrongfully denied
A key man life insurance legal professional will help evaluate your claim denied due to contestability and will give you advice whether a corporation’s declare was denied for legitimate reasons.

Under the regulation, only material misrepresentations on the application can cause policy cancellations. Material misrepresentations on a life insurance policy application are non-disclosures and statements that affect the insurance company’s underwriting chance.

A key man life insurance attorney will research the facts of the denial, study the records and evaluate alleged misrepresentations to see if they were substance to this particular insurance provider.

If your key man insurance coverage claim has recently been denied, call Insurance attorney in Chicago for help.