7 Common Reasons Why Insurers Deny Life Insurance Claims


When you purchase a life insurance policy, there is always a chance that the claim made by your beneficiary will be denied, and it is imperative that you comprehend the reasons behind this possibility.

Amy Bach, who serves as the executive director of the United Policyholders consumer group in San Francisco, asserts that in order for insurance companies to ensure that policyholders have fulfilled their responsibilities, the conditions of their policies are thoroughly analyzed prior to the payment of claims.

If the insurance company believes that you have violated the terms of your policy, it has the right to return any payments made on your premiums to your estate but is not required to provide any benefits to your beneficiaries. “Don’t give your insurance a reason to deny your claim,” Bach advises.

In the tragic event that one of their loved ones passes away, life insurance policies are designed to provide financial support to the deceased person’s dependents and family members. The contracts that govern the relationship between policyholders and insurance companies are legitimate and enforceable under the law.

1. Suicide or deaths caused by illness (for accidental policies)

Policies known as “accidental death and dismemberment” (AD&D) are frequently offered with the expectation that if the insured dies of a non-natural, “accidental” cause, a death benefit will be paid to the insured’s beneficiaries. 

On the other hand, insurance companies frequently define “accident” in arbitrary ways and demand that a series of conditions be met before they agree to pay out. Because of this, insurance companies typically justify their decisions to deny claims by pointing to evidence concerning the conditions under which the insured passed away. It is essential to be aware of the fact that AD&D policies do not include coverage for suicide.

2. Death within the first two years of the insurance

The first two years of a life insurance policy are typically considered to be the “contestability period.” This refers to the time period during which an insurance provider has the legal right to investigate the claims made in an application for life insurance. 


In the event that the insured person passes away while the contestability period is still active, the company will carry out a comprehensive investigation into the person’s medical records in addition to any other information that was requested on the application. 

This signifies that the insurance company has the right to cancel the policy and return any payments made in lieu of paying the full amount of the death benefit if the application contained any false statements, omissions of truth, or other errors. 

This tactic is utilized by insurance companies in a very common manner. despite the fact that the alleged misrepresentation had nothing to do with the insured person’s passing.

In addition, the majority of contracts for life insurance include a “suicide clause” that has a waiting period of two years and allows for the denial of claims in the event that the policyholder commits suicide. 

This is done with the intention of discouraging people from purchasing life insurance policies with the intent of immediately committing suicide and leaving their loved ones with a large payout from the policy. However, suicidal tendencies are not always obvious, and life insurance companies will typically refuse to pay out claims if there is even a remote possibility that the insured will kill themselves.

3. Failure to pay premiums

When a person purchases a life insurance policy, the commitment of the insurer to pay benefits is contingent on the policyholder making the required premium payments. If you neglect to pay, the insurance company will usually give you a one-month grace period after the due date to make the payment. 

If you do not make the payment during the grace period, the policy will be considered to have “lapsed,” and you will no longer be covered by insurance. If you miss even one payment on your insurance premium, you run the risk of having your coverage terminated, even if you have a perfect payment history dating back decades.

4. Suicide by homicide

In the vast majority of cases, a payout from life insurance coverage should be made in the event that a person is murdered. In the event that the insured person is murdered, however, insurance companies have the right to refuse a claim made by a beneficiary in certain circumstances. In the event that the beneficiary is under investigation for the insured person’s murder, for instance, the death benefit will not be paid out to them.

until all potential contributors to the death of the insured have been eliminated. In addition, in most cases, life insurance companies will not pay out a claim if the insured person was killed while engaging in activities that are considered unlawful or criminal.

5. A condition in the policy stated that it does not pay out.

Insurance companies frequently include clauses in their policies stating that they are not obligated to pay benefits for reasons that defy explanation. This is especially true in terms of Accidental Death and Dismemberment (AD&D) policies, in which companies will define “accidental” death in a way that is purposefully difficult to meet. 

The policy will not pay out if the insured person passes away more than ninety days after the incident that resulted in his or her passing, and if you are a pilot, your passing away while flying an airplane will not be covered by the insurance policy. If the insured person passes away more than ninety days after the incident that resulted in his or her passing, the policy will not pay out. 

Although life insurance firms are constitutionally compelled to pay, they frequently use one of these reasons for dismissing beneficiaries’ claims. 

Don’t hesitate to call an experienced life insurance lawyer for a free case evaluation if your life insurance or AD&D claim has been unlawfully delayed or refused.

6. The insurance policy did not cover this particular kind of death.

According to Weisbart, traditional life insurance policies contained a wide range of exclusions, the nature of which was dependent on the reason for the policyholder’s passing. When an insured person dies while participating in a dangerous activity like skydiving or scuba diving, insurance companies will frequently refuse to pay claims for the deceased person. This is because these activities pose a higher risk of injury or death.

One of the most common reasons for being denied entry was that the person had died in battle. According to the information Weisbart has provided, this is no longer the case. Exclusions for suicide deaths are currently the only ones that are commonly used in the line stability timeframe.

 He goes on to say that the homicide exclusion is frequently lifted if the death occurred beyond the contestability timeframe. This is what he meant by that. 7. You refused to share relevant personal information.

The most common factor for insurers’ refusal, according to Kantor, is the failure to provide information essential to accurately determine the danger of a coverage payout. “It’s justification for them to decline your claim if you sought protection and didn’t respond to inquiries honestly,” Kantor claims.

Not all faulty data, such as an address change or personal identification numbers, are reasons for denial, according to Kantor. Rather than willful mischaracterizations, these would be considered errors.

It is possible that you will not be allowed to race if you fail to disclose convictions for racing while under the influence of alcohol; however, this will only be the case if the conviction is discovered within the contestability timeframe. Weisbart makes the observation that these judgments are rarely used to invalidate claims after the deadline for public comment has passed.

Even if they’re discovered after the contestability period has finished, some misrepresentations of facts are grounds for refusing or decreasing a death benefit, according to Weisbart.

A survivor benefits claim will be refused if the company determines that you influenced a physician to provide false data to cover up a chronic condition.


The primary objective of insurance coverage is to give financial stability to family and friends following the death of a loved one. A life insurance policy, on the other hand, does not guarantee protection. 

Even if the contracts are legitimate and have the force of law behind them, they frequently contain loopholes that insurance companies can use to get out of paying payments. In the majority of situations, the insured policy owner is the one who pays premiums to the insurance company. These payments are made in exchange for the company’s promise to pay a certain amount to the beneficiary in the event of the insured policy owner’s passing. 

In the unfortunate event that the insured person passes away, the beneficiary is the one who has the legal authority to file a claim. Every claim delay or denial should be reviewed by a seasoned attorney who specializes in life insurance, and a challenge should be filed if it appears that a claim was refused or delayed in an unfair manner.

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