It’s not uncommon for insurance companies to delay or even deny payments promised in a policy you purchased from them — whether it’s a property, health, or life insurance policy. All too often, these delays and denials are part of what is commonly referred to as “bad faith” tactics by the insurer.

What if a loved one dies and the insurance company refuses to honor that person’s life insurance policy? The insurer could cite a number of factors, but what do you do if that happens?

If you live in Chandler, Arizona, or the surrounding areas of Phoenix, Tucson, or Flagstaff, contact Arnett & Arnett, PC. Our attorneys have experience on both sides of the issue — representing insurance companies and representing consumers — which is now our sole focus. We know all the bad faith tactics used by the big insurance companies and we can fight to protect your rights and help you pursue the benefits you deserve.

Arizona Laws Affecting Life Insurance

Arizona Revised Statutes, Section 20-254, defines life insurance as “insurance on human lives and insurance appertaining thereto or connected therewith.” The statutes further provide certain protections for those who choose to purchase life insurance. Among these protections are:

  • Late-Payment Grace Periods: Arizona law forbids an insurer from canceling a policy if the payment is made within 30 days of the due date.

  • Personal Information Protection: Insurance companies cannot release or use personal information for any purpose other than to process your insurance policy. This includes any personal information you provide during the application process.

  • Timely Payment on Claims: On a life insurance policy, claims typically must be made within two months, or the insurer can face penalties, including paying accrued interest on the proceeds. 

Benefits Guaranteed: Even if your insurance company goes out of business, the Arizona Life and Disability Trust Fund will cover your life insurance policy. However, the limits are $300,000 for lost death benefits and $100,000 for a lost cash surrender.



Typical Reasons for Denying Life Insurance Claims

In most cases, insurance companies will promptly honor life insurance claims, but they’ve also been known to throw out reasons that beneficiaries don’t fully understand in an effort to delay or deny payment. In some cases, the cited reasons may be legitimate. Common reasons for denying a life insurance claim include:

Contestability Period

Life insurance policies generally preclude payments for death during the first two years of the policy. If the death occurs during this contestability period, the company may deny the claim.

Cause of Death

Life insurance policies generally won’t cover claims for policyholders who die from suicide. Other exclusions may also apply, including drug and alcohol abuse, involvement in dangerous activities, and more.

Failure to Disclose Necessary Information

If the policyholder had a pre-existing condition — such as high blood pressure — prior to taking out the policy and failed to disclose it, the insurer can deny claims.

Non-Payment of Premiums

If a payment is received after the grace period expires, the insurance company can proclaim the policy to be lapsed or terminated. If that happens, no claim will be honored.

Lack of Beneficiary Designation

If there is no beneficiary named in the policy, the insurance company can deny payment, or after a lengthy delay, pay it to the deceased’s estate.

What to Do in The Face of a Denial

Fortunately, according to the American Council of Life Insurers (ACLI), fewer than one-half of one percent of all life insurance claims are denied, but if you’re one of them, what can you do?

If your insurance company denies your claim, the first step is to investigate the reason given so you can lodge an appeal. Ask the insurance company for its requirements on filing an appeal, and get to work on gathering the documentation and evidence you need to counter the company’s reason for denial.

Sometimes, the insurer may be hoping you won’t look too deeply and just give up in face of complex appeal requirements. Don’t. They could be using bad faith tactics against you to frustrate and stall you. If you feel like you’ve been wrongly denied a claim, don’t face this challenge on your own. Call or reach out to our firm, Arnett & Arnett, PC, for help.


Navigating the appeals process — and the hurdles and loopholes the insurer is sure to throw your way — is not going to be easy. Do not try to go it alone. You will definitely need the assistance of experienced legal counsel. If you live in Chandler, Arizona, or in the surrounding areas of Phoenix, Tucson, or Flagstaff, rely on the life insurance attorneys at Arnett & Arnett, PC. We are familiar with the tactics and tricks of the big insurance companies, but now we represent only consumers who are facing issues with those very same insurers. We’re on your side. If your life insurance claim has been denied, contact us today for a free consultation.