Life insurance companies often deny payments by twisting the words of their insurance applications to rescind, or take back, the insurance policy they issued. This allows them to return whatever premium was paid, and avoid paying a much larger amount to the policy beneficiary. In Georgia, an insurance company can rescind an insurance policy if the person who filled-out the application misrepresented facts, and the insurer shows it would not have issued the policy had the true facts been known. This opens the door for insurance companies to go back after a claim is made, and comb through the application, medical charts, and other records for any excuse to argue they were mislead in issuing the policy.
However, insurance companies cannot use their own unclear, ambiguous application questions against their insureds. Insurance applications and policies should be read as a layman would read them. The test is not what the insurance company claims its words mean, but what a reasonable person in the position of the insured would understand them to mean. When these words are ambiguous, Georgia law construes them against the company, and in favor of coverage.
If you are denied life insurance benefits, it is crucial to have a knowledgeable lawyer review the documents to determine whether the denial is properly based on clear facts. If not, you may be entitled to additional Bad Faith penalties and attorney’s fees in addition to the full policy benefits.