Receiving a claim denial letter from a life insurance company is heart-wrenching. Typically, a life insurance claim denial letter arrives after months of delays during a period in which the beneficiary family is still grieving the loss of their loved one. Often, this beneficiary family is counting on these life insurance proceeds. So, reading that claim denial letter from the life insurance company can be a brutal experience Surprisingly, along with the horrific claim denial letter, the life insurance company has included a check. However, this check is not for the full amount of the life insurance policy, rather a tiny fraction of that amount. This can be very confusing for a life insurance beneficiary. What is this check, what is it for, and should a beneficiary cash the check? Essentially, the life insurance company has sent a check for a refund of all the premiums paid for that life insurance policy in an effort to erase the policy for good. You should not deposit a “rescission” refund.
What Is a “Rescission” Premiums Refund Check?
The check that the life insurance company has sent to a beneficiary along with a claim denial letter is known as a “rescission” check; it is a check for a refund of all the premiums paid for that life insurance policy. In the life insurance company’s claim denial letter, if one reads closely, the life insurance company essentially tells the beneficiary not only that “your claim is denied,” but also that “if you cash this check, you can’t come after us for the entire policy amount.” This is basically what a rescission refund check is – another way for the life insurance company to escape from paying the claim.
Basically, the life insurance company, which is obviously working against the beneficiary, seeks to “rescind” the policy instead of paying it out. Rescind and rescission mean the same exact thing, which is to undo the life insurance policy and make it disappear as if it never even existed at all. Again, the life insurance policy isn’t being “canceled,” it is legally being made as if it “never even existed at all.” And if the life insurance policy never even existed, then certainly the life insurance company does not have to pay it out. The life insurance company typically argues that it can rescind a life insurance policy because of material misstatements (meaningful errors or misrepresentations) by the policyholder in the life insurance policy application, so long as the insurance policy is within the two-year contestable period and the insurance company has given notice of the rescission and refunded all the premium payments.
Should You Cash a “Rescission” Premiums Refund Check?
No, a beneficiary should NOT cash or deposit the “rescission” premiums refund check that the life insurance company has included with its denial letter!
If a beneficiary does cash or deposit the “rescission” premiums refund check that the life insurance company has included with its denial letter, the life insurance company will argue that the beneficiary accepted the rescission of the life insurance policy and gave up his or her rights to file a lawsuit against it. In many cases, the Judge will agree with the life insurance company about the rescission and dismiss the beneficiary’s case. At the very least, it will make it more difficult and more complicated for the beneficiary to recover the entire policy. Cashing or depositing the rescission premiums refund check is just another tool that an insurance company can use against a beneficiary, so a beneficiary should not give the insurer that tool.
Again, do NOT cash or deposit the “rescission” premiums refund check that the life insurance company has included with its denial letter!
What Happens If You Did Cash the “Rescission” Premiums Refund Check?
Life insurance laws indicate that there must be a “meeting of the minds” for rescission to occur. That is when a life insurance company mails a letter to a beneficiary stating its intent to rescind and tenders a check to the beneficiary representing a refund of the premiums, and the beneficiary understands the intent to rescind when cashing the check, a meeting of the minds is deemed to have occurred. Thus, unfortunately, courts have regularly held that when a beneficiary voluntarily cashes a premium refund check with the knowledge that the purpose of such check is rescission of the policy, such action on the part of the insured shows that a meeting of the minds, and, thus, rescission, has occurred.
Let New Orleans Legal Fight for Your Life Insurance Benefits
If you have been denied a life insurance claim, or the life insurance company is still giving you the run-around, you need the assistance of an experienced life insurance attorney right away. In fact, most life insurance companies will not pay a life insurance claim that they have previously denied until the beneficiary is represented by an attorney willing to pursue penalties and attorney’s fees against the insurance company. Let New Orleans Legal stand with you and fight back against the life insurance company.
At New Orleans Legal, we understand how heart-wrenching it is to receive a claim denial letter, especially after a recently deceased loved one has paid premiums to know that this family would be taken care of. If your life insurance claim has been denied, please call attorney Peter Diiorio at New Orleans Legal, LLC, to start to get the life insurance proceeds you deserve. Do not accept a rescission premium refund check before at least taking advantage of a free no-obligation consultation with Mr. Diiorio.
Mr. Diiorio of New Orleans Legal, LLC is an experienced Louisiana life insurance claim attorney representing insureds and beneficiaries in life insurance claim disputes against life insurance companies. Mr. Diiorio is happy to handle your case on a contingent fee basis, which means that all legal fees are taken at the end only if there is a recovery of life insurance proceeds for you. Please contact us now at (504) 897-5580 to schedule a free face-to-face, Zoom, or telephone consultation, and let us handle the life insurance company for you.