American Association of Justice

Defenses to Life Insurance Denials Based on an Alleged Material Misrepresentation

There are some common defenses that beneficiaries can assert when a life insurance policy has been denied based on a claim of material misrepresentation.

The Misrepresentation was not “Material”

Not every omission or misrepresentation in a life insurance application rises to the level that it is “material.” The insurance company has the burden to show that an omission or misrepresentation in the application, if it had been known, would have caused it to deny coverage or assess a higher premium rate. Not all facts or conditions inquired about in the application will meet this standard, nor will all personal and medical information that an applicant fails to disclose. Some will be minor or trivial because they have no impact on either the mortality risk or the amount of insurance offered.

Demand Underwriting Guidelines and Other Materials

In a lawsuit, a life insurance company must produce documentation concerning its underwriting practices. It cannot rely on mere conclusions in order to disclaim coverage.

Life insurance companies have detailed underwriting guidelines and other materials that rate or classify a whole array of medical conditions and financial information. A life insurance lawyer should know to demand this information during a lawsuit to verify if the reason for the claim denial is a valid one.

Were Other Facts or Conditions Ignored During the Application Process?

It is important to discover if the life insurance company ignored certain health risks or personal information when issuing the policy, but stresses the importance of those not disclosed that it relies upon to justify the insurance denial. Such evidence may show that the denial is not objective and was motivated by the insurer’s financial interests. In other words, it may show that the underwriting standards used during the application process are different than those used to investigate a death claim. This approach can be very effective in overturning a life insurance denial.

After all, if the life insurance company dismissed a condition as insignificant, and issued a policy at an incorrect and impermissible rate, why should a court believe that it would have correctly rated the undisclosed condition if it had been known?

In their rush to get business and receive premium payments, life insurance companies will often ignore medical and financial facts in order to be competitive.


Sometimes a life insurance company, when it issued the policy, had sufficient information to put it on notice of the fact or condition that it later alleges was not properly disclosed. In such a case, a life insurance attorney may be successful with a waiver defense.

The Misrepresentation was Innocent, not Intentional

Although the law in New Jersey and New York is not as favorable to life insurance consumers as in some other states, there are instances when a successful argument can be made that an omission or misrepresentation was not intentional. These may include situations where:

  • The agent was at fault
  • The insured had a disability
  • The insured had a language barrier
  • Lack of knowledge of a condition or its significance

Although it can be difficult to succeed with these types of defenses, there are instances where they will support overturning the denial of a policy.

A skilled life insurance attorney with a knowledge of New Jersey and New York life insurance law can evaluate the application, policy, and underwriting guidelines to determine if a material misrepresentation was made or if the policy should rightfully be paid.

Please contact New Jersey and New York Life Insurance Attorney Eric Dinnocenzo at (212) 933-1675 to discuss if you have a valid life insurance denial claim.

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