Can a Life Insurance Claim Be Denied?

One of the best things you can do for your family is to purchase a life insurance policy to protect their financial future. And the last thing you want is their claim to be denied after you pass, which can happen in rare cases. If you purchase your plan from a reputable life insurance company and keep up with the payments, you don’t have much to worry about, but it is important to know the reasons why an insurer can contest or delay payment on a claim, as well as the reasons why claims are denied, so you can avoid any of these issues for your family. 

Why Life Insurance Companies Deny Claims

As we pointed out above, it’s relatively rare to have a life insurance claim denied, but it can happen. Some of the main reasons that an insurer won’t pay out a death benefit include:

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Failure to keep up with your life insurance payments will result in any claims on your policy made to be denied.

Failure to pay your premiums

If you are not up-to-date on your premium payments when you pass away, your family might not be eligible for a payout, which is why it is very important to make sure that you’re paying your premiums each month (or quarter, or year). Your policy will eventually lapse if you don’t pay your premiums, but before this happens, your insurance company will generally give you notice that the policy is in danger of expiring. They will most likely offer a grace period, so you can pay the overdue premium and continue your coverage. 

You were not honest on your application

One of the most common reasons given by life insurance companies for denying a claim is that a policyholder submitted an incomplete or false application. Life insurance policies have a contestability, or “look back” period, meaning your insurer can review your application to look for statements that can be considered misrepresentation. Generally, this contestability period is 2 years after you purchase your policy, and if you die during the contestability time, your insurer has the right to investigate your family’s claim. If it turns out that you omitted anything, such as a serious illness you didn’t disclose, or if you lied in any way on your application, your insurer can deny your family’s claim. The only silver lining to this is that the insurer will return any premiums that you paid back to your family.


Most life insurance companies have a suicide clause in their policies, which means that they will not pay benefits if the policyholder dies by suicide within a certain amount of time (generally 2 years) after purchasing the policy. If you commit suicide during those two years, your insurer can deny your family’s claim, but they will return the premiums that you paid to your family.  If you or someone you know is having suicidal thoughts, please reach out to the National Suicide Prevention Lifeline at (800) 273-8255.

Your policy’s term has expiredexpired stamp in red

If you have a term life insurance policy, make sure that you know exactly when it expires, so your family doesn’t end up with an expired policy. If you outlive your term life policy and would like to extend coverage for your family, you have to renew your policy, or purchase a new plan. If your term life insurance policy expires before you pass away, and you have not renewed it or purchased a new plan, your family will not get anything when you pass away. 

It is important to know why life insurance claims can be denied, so you can make sure your family gets the benefits they are owed. And if you’re currently looking for a policy that will protect your family’s financial future, make sure you compare policies from different companies and work with an agent who can help you. We have provided the top life insurance companies in the nation that offer hassle-free assistance and the most competitive rates below. Always check multiple sites to make sure you have bargaining power and know the different advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

About The Author: Cassandra Love

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