The 4 Most Common Reasons Insurers Deny Life Insurance Claims
Life insurance is meant to provide financial protection for your loved ones after you pass. But if a claim is denied, the consequences can be devastating. Understanding the most common reasons life insurance companies deny claims can help you avoid mistakes and ensure your family gets the benefits they deserve.
To protect your beneficiaries and avoid issues after your death, it’s important to understand why claims are most often rejected. Below are the four most frequent causes of denial — and how to avoid them.
1. Death Occurred During the Contestability Period
Most life insurance policies include a contestability period, usually lasting two years from the policy’s start date. During this time, if the policyholder passes away, the insurer can closely examine the application for any misstatements or omissions.
Even minor inaccuracies — such as misstating your weight, failing to disclose a medical condition, or omitting tobacco use — can give the insurance company grounds to deny the claim. In some cases, claims may also be denied if the death is ruled a suicide within the contestability window, depending on the policy terms.
It’s essential to answer every application question truthfully and review your policy carefully so your family isn’t caught off guard during this time period.
2. Type of Death Not Covered Under the Policy Terms
Life insurance policies include exclusions that may limit coverage based on the cause of death. While natural causes are typically covered, the following scenarios might not be:
- Death while engaging in high-risk hobbies (like skydiving or motor racing)
- Death while committing a crime
- Death resulting from acts of war or terrorism
- Death due to drug or alcohol overdose (depending on policy terms)
Additionally, suicide is typically excluded during the contestability period but may be covered afterward. If your death is ruled a homicide, the policy may pay out unless your beneficiary is suspected of being involved.
To protect your family, take time to review your policy’s exclusions and ask your insurer or an attorney if anything is unclear.
3. Premium Payments Were Not Current
One of the simplest yet most avoidable reasons for denial of life insurance claims is nonpayment of premiums. If payments are missed and the policy lapses — even by accident — your coverage can be canceled.
Most policies provide a grace period (typically 30 to 60 days) during which you can bring the account current. But if that window closes without payment, your policy may be terminated without your family’s knowledge.
To avoid unintentional lapses:
- Set up automated payments
- Opt in for payment reminders
- Consider designating a third party to receive lapse notices on your behalf
4. Application Contained Misrepresentations or Omissions
Misrepresenting or omitting details on your life insurance application — even unintentionally — can lead to a claim denial. Life insurers rely on your disclosures to assess risk and determine your premium. If it’s discovered after your death that key facts were incorrect or withheld, the insurer may refuse to pay the benefit.
Areas where honesty is especially critical:
- Past and current medical conditions
- Prescription medications and treatment history
- Dangerous hobbies or activities
- Occupation, particularly if it involves elevated risk
Your best protection is full transparency. This ensures your policy remains valid and gives your loved ones the coverage they expect.
Other Common Reasons Life Insurance Claims Are Denied
While the four reasons above are the most common, there are other circumstances that can lead to denied claims:
Beneficiary Issues
If the named beneficiary is unclear, contested, or outdated (such as an ex-spouse or deceased person), the insurer may delay or deny payment until the matter is legally resolved.
Incomplete or Delayed Paperwork
Missing documents — like the original policy, a certified death certificate, or proof of identity—can delay processing or cause denial if not submitted correctly.
Group Policy Limitations
Employer-sponsored group life insurance often has limitations. If an employee leaves the job and doesn’t convert or replace their group policy, they may no longer be covered, leaving families without benefits.
Outdated Policy Information
Changes in legal name, address, marital status, or number of beneficiaries that aren’t updated can cause processing issues or delays.
What to Do If Your Life Insurance Claim Is Denied
A denial doesn’t always mean the end. You have the right to appeal a life insurance claim denial, and in many cases, insurers reverse their initial denial after review. Here’s how to start:
- Request a written explanation from the insurer.
- Gather documentation related to the policy and application.
- Review the denial reason in detail to identify any errors or ambiguities.
- Speak with an experienced life insurance attorney to assess your options.
Legal guidance can make a significant difference, especially if your claim was denied based on a technicality, delay, or misunderstanding.
Talk to a Life Insurance Lawyer at No Cost
If your life insurance claim has been denied — or if you’re unsure whether your policy is secure—contact our legal team today. We’ve helped countless families fight back against wrongful denials and recover the benefits they’re owed.
Call Boonswang Law at (855) 610-3807 to speak with a life insurance attorney today.
