Common Causes for a Denied Life Insurance Claim

Mid adult psychiatrist writing notes while having a therapy with male patient during COVID19 pandemic

Life insurance is a critical safety net for many families, providing financial security in the event of a loved one’s death. However, it’s not uncommon for life insurance claims to be denied. Knowing the common causes for a denied life insurance claim can help you take proactive steps to avoid these pitfalls.

1. Application Errors and Omissions

One of the leading causes of denied life insurance claim  is errors or omissions on the application. This can range from minor mistakes to significant oversights. Insurers scrutinize applications closely, and even unintentional errors can lead to claim denials.

Common Application Mistakes

  • Incorrect personal information
  • Inaccurate income details
  • Failing to update changes in health status

2. Misrepresentation and Non-Disclosure

Deliberately providing false information or withholding relevant details is another primary reason for denied life insurance claims. Misrepresentation can occur if an applicant lies about their health, lifestyle, or occupation. Non-disclosure, on the other hand, involves omitting critical information that could influence the insurer’s decision.

Consequences of Misrepresentation

  • Higher premiums than necessary
  • Policy cancellation
  • Claim denial

3. Policy Lapse Due to Non-Payment

A reasons life insurance won’t pay out regular premium payments to remain active. If these payments are missed, the policy can lapse, meaning it no longer provides coverage. A lapsed policy is one of the most straightforward reasons for a denied claim.

Preventing Lapses

  • Set up automatic payments
  • Monitor payment schedules
  • Communicate with the insurer if payments are missed

4. Death Within the Contestability Period

Most life insurance policies include a contestability period, usually lasting two years from the start date of the policy. During this time, the insurer can investigate and deny claims based on application inaccuracies or fraud. Claims made within this period are scrutinized more rigorously.

Navigating the Contestability Period

  • Be transparent in the application process
  • Maintain accurate records
  • Cooperate fully with any investigations

5. Policy Exclusions

Life insurance policies come with specific exclusions that outline scenarios in which the insurer will not pay out benefits. Common exclusions include death due to suicide within the first two years, death during the commission of a crime, or death related to high-risk activities.

Reviewing Policy Exclusions

  • Read the policy thoroughly
  • Clarify any unclear terms with the insurer
  • Consider additional coverage for high-risk activities

6. Fraudulent Claims

Fraud is a serious issue in the insurance industry and can result in denied life insurance claims. This includes any attempt to deceive the insurer, such as falsifying documents or staging an event to trigger a payout. Insurers have sophisticated methods to detect and investigate fraud.

Examples of Insurance Fraud

  • Faking death
  • Altering medical records
  • Colluding with third parties to stage events


A denied life insurance claim can be a significant setback during an already challenging time. By understanding and avoiding the common causes of denial, you can better ensure that your policy will provide the financial support your beneficiaries need. Always be honest and thorough when applying, keep your policy active, and familiarize yourself with the terms and exclusions of your policy. In the event of a denied claim, knowing the reasons and how to address them can help you navigate the appeals process more effectively.

You May Also Like

More From Author

+ There are no comments

Add yours