Life insurance comes in many forms: term, whole-life, universal, group, individual, accidental, etc. Some life insurance products are simply add-ons for an employment package and others are purchased as investment products. Whether purchased individually or provided through an employer, these policies can be subject to terms that are confusing and contradictory.

Some of the most common reasons for a denial of a life insurance claim include:

1. Material Misrepresentation: This is one of the most common reasons for a denial of a life insurance claim and only comes up if the insured dies within the contestability period (two years after the commencement of the policy). An example would be failing to disclose a prior medical issue at the time coverage was purchased.

2. Non-Payment of Premiums: If the policyholder fails to pay premiums within the grace period specified in the policy contract, the insurance company may terminate the policy or deny any claims filed after the lapse of coverage due to non-payment.

3. Policy Exclusions: Life insurance policies often contain specific exclusions that outline circumstances under which the insurance company will not pay out benefits. Common exclusions may include death resulting from suicide within a certain period after policy issuance or death caused by engaging in illegal activities.

4. Fraud: If the insurance company discovers that the policyholder or beneficiary engaged in fraudulent activities related to the claim, such as submitting falsified documents or staging the insured's death, the claim may be denied, and legal action may be taken.

5. Policy Conditions Not Met: Certain policy conditions must be met for the claim to be eligible for payment. For example, if the insured's death occurs under circumstances explicitly excluded by the policy or if the insured's death is not properly reported to the insurance company within the specified time frame, the claim may be denied.

6. Unintentional Policy Lapse: In some cases, a policy may inadvertently lapse due to administrative errors, such as failure to process premium payments or update contact information. If the policy lapses without the policyholder's knowledge, it could result in claim denial.

If you would like to learn more about the different types of life insurance, click here.

If you are the beneficiary of a policy that has been denied, we may be able to help.