I found a small life insurance policy my father had purchased for his family after he passed. I sent the policy to the company who denied it for general reasons. I then called the company who told me to send it to another department who again said it was expired but there is no expiration date on the policy. I believe this company just doesn't want to make good on the small policy. Has anyone ran into this issue and can I file in court petitioning the company to pay up or prove this policy is no longer in effect.
I can say that if the policy is active, life insurers generally aren't in the business of rejecting claims to keep money. There are claims settlement standards under law for all 50 states, and frankly, if the policy and claim is "in good order", insurers generally pay. We don't sit around here thinking up ways to keep money on active policies, large or small. But insurers also aren't going to pay on term policies that expired or policies that lapsed. And yes, insurers are permitted by law to destroy records on inactive policies over 7 years of age. It's not an excuse - it's a reality that we can't keep every document forever and the law permits any business to adopt a records retention schedule and each document is coded in accordance with record retention laws (3 years to 10 years, depending on the document). My company happens to retain a lot longer, but insurers aren't forced to hold onto records indefinitely, either, and we are working to clear out such old records for storage/cost reasons.
If the company told you it was expired, it was likely a term policy or it could have lapsed, as well, due to non-payment, no matter what the policy type. If you happen to be the executor of your parent's estate, you can use your appointment paperwork to obtain information on the policy and determine what kind of policy it was, and the policy history or you'll get a formal response as to what kind of policy it was, went it termed out or lapsed, and that the records aren't available due to record retention expiration.
You can certainly file an action with the court, if you wish. You would best be served by giving your authority to the insurer and obtaining the documents (if available) regarding the policy before making a decision to proceed with a court action. If you prefer to go straight to your state's Department of Insurance, that's another way to potentially obtain information, as insurers have procedures and timelines established by each state's laws as to responding to DOI inquiries.
Whole Life Insurance is good for the entire life. Term Insurance is cheaper for a reason. After the Term (often 10 years) the policy is no longer valid.
I am sorry for your loss.
I don't know where you live but we are in California and after being denied the claim, we filed a complaint with our state commissioner of insurance. After they stepped in they forced the claim to be paid because they had collected the premiums for years after it's expiration of policy.
I guess long story short, If you really don't have a clear answer and believe that this is something you need to pursue you may want to have the state commissioner of insurance review why it was denied. It may take awhile to get an answer but at least you would know?