What Are the Reasons That Cause Life Insurance Payments to Be Denied?

When you buy a life insurance policy, you expect it to protect your family. There are instances, however, that your family’s claim against your life insurance may be denied. Almost every life insurance policy will contain certain exclusions that will result in the denial of your family’s claim. It’s important to know what is in your policy when you purchase it.

Suicide Clause

While most life insurance will deny paying the death benefit if a person commits suicide, a few states require a suicide clause that results in the family receiving the amount of money that has been paid in as premiums. Every situation is different. When you have questions, it’s important to talk to your agent.


When a person is murdered, a death benefit through a life insurance policy will always be paid. However, if the insured is killed by their beneficiary, the beneficiary will not be allowed to collect the death benefit. Instead, the money will go to the insured’s estate. Depending on the situation, the death benefit may not be paid until the murder investigation is completed.

Read: Debunking Common Myths about Life Insurance Settlements

Hazardous or Dangerous Activities (Criminal, War, Riots)

Participating in dangerous activities is another reason for a claim to be denied. This can include participating in riots, any type of criminal behavior, or acts of war. In terms of war, this does not include soldiers. Instead, this pertains to individuals who travel to war-torn areas either for pleasure or for work. Other hazardous activities include auto or motorcycle racing and skydiving.

Drug Overdose/Drunk Driving

Drug overdoses and drunk driving fatalities are also not eligible to receive death benefit payouts. There might be a distinction if a person was using prescribed drugs. Talking to your insurance agent will clarify any questions you may have. Many prescription drug overdoses are accidental in nature.

Read: Don’t Make These Big Life Insurance Blunders

Being Less Than Honest on Your Application

When filling out your application, it’s important to be honest about past health habits, such as smoking or alcohol use. It’s possible that you may forget certain things or inadvertently admit relative information. When applying for life insurance, it’s essential that you are as upfront and honest as possible. If you remember something after you have completed the application, call your agent and let them, and they can update your policy.

Special Provisions and Mistakes in Group Life Insurance Policies

There are several provisions within group life policies that you need to be aware of. A good example of this is that you will lose your group life insurance benefits if you lose your job. There are also instances when a person must be able to prove insurability. If any part of that process is mishandled, you may lose your coverage.

Non-Payment of Premiums

Non-payment of premiums is also a common reason why death benefits are denied. If you have a policy and something happens that causes you to forget to pay the premiums, you will lose your coverage. This can easily occur if you have a policy that no one knows about. If your family doesn’t know about the policy, they won’t be able to pay the premiums if you get sick or injured.

Having a life insurance policy does not always mean your family will be able to collect the death benefit it offers. When you have questions about what exclusions are included in your policy, it’s important to talk to an agent. At Jack Stone Insurance Agency, we can help you understand your life insurance policy and help you find the right one for you.

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