Common Reasons Life Insurance Claims Get Denied

A life insurance denial can be a devastating blow, especially when you’re counting on those funds to provide financial stability after a loved one’s passing. Understanding the reasons behind a denial is crucial, as it allows you to address potential issues and work toward a resolution. In many cases, denied claims are not the end of the road. With the right information, you may have the opportunity to appeal or challenge the insurer’s decision.

Below are some of the most common reasons life insurance claims get denied, along with guidance on what you can do to counter these issues.

1. Policy Lapses Due to Missed Premiums

One of the most frequent causes of denial is a lapsed policy. If premium payments are not kept up to date, the policy may be terminated, leaving beneficiaries without coverage. Insurers are usually required to provide notices before canceling a policy, but if those notices were not sent or were unclear, the policyholder’s beneficiaries may have grounds to challenge the lapse.
What you can do:

• Gather proof of payments.
• Check whether the insurance company followed the legal requirements for notifying the policyholder of non-payment.
• Contact the insurer to confirm if a grace period or reinstatement option is available.

2. Misrepresentation or Omissions on the Application

Insurers rely heavily on the information provided during the application process. If the policyholder failed to disclose important details—such as a pre-existing medical condition, lifestyle risks, or certain hobbies—the insurer may deny the claim.
What you can do:

• Review the application thoroughly.
• Determine if the omission or error was material to the claim.
• Provide additional medical records, affidavits, or expert opinions showing that the omission did not affect the cause of death.
• See if the question on the application was vague or ambiguous.

3. Death Occurring Within the Contestability Period

Most life insurance policies have a contestability period (often the first two years after the policy takes effect). If the insured passes away within this time frame, the insurer may closely scrutinize the application and circumstances surrounding the death. Any inaccuracies in the application could lead to a denial.
What you can do:

• Gather medical and financial records to prove that the application was accurate.
• If inaccuracies are found, demonstrate that they were unintentional and unrelated to the cause of death.

4. Policy Exclusions and Limitations

Life insurance policies often contain exclusions for certain causes of death. Common exclusions include suicide (usually within a certain time frame after the policy begins), deaths resulting from high-risk activities, and deaths caused by illegal acts. If the insurer cites an exclusion, carefully review the policy to confirm that it applies.
What you can do:

• Compare the stated exclusion to the circumstances of the death.
• Provide evidence that the exclusion does not apply or was incorrectly interpreted.
• If the language in the policy is ambiguous, consult with a life insurance attorney who can help challenge the insurer’s interpretation.

5. Beneficiary Designation Issues

Sometimes the insurer denies a claim because there is uncertainty or dispute over who the rightful beneficiary is. This can occur if:

• The policyholder changed the beneficiary shortly before death.
• There are multiple beneficiaries claiming the proceeds.
• The insurer cannot locate the listed beneficiary.

What you can do:

• Provide documentation showing the insured’s intent, such as signed forms or correspondence.
• If you are a competing claimant, offer evidence supporting your claim.
• Work with an attorney to resolve disputes, potentially through the interpleader process, where a court decides the proper beneficiary.

6. Insufficient or Missing Documentation

If the insurer doesn’t receive all required documents—such as the death certificate, proof of identity, or properly completed claim forms—the claim may be denied. Even minor paperwork errors can cause delays or rejection.
What you can do:

• Double-check all submitted forms for accuracy.
• Confirm that all documents requested by the insurer have been provided.
• Follow up with the insurance company to ensure they have everything they need to process the claim.

7. Fraud or Alleged Fraudulent Activity

In rare cases, the insurer might claim that the policyholder engaged in fraudulent behavior when obtaining the policy. For example, they may allege that false information was deliberately provided to secure lower premiums.
What you can do:

• Gather evidence that supports the accuracy of the information provided at the time of application.
• Submit any medical records, financial statements, or third-party testimony that refutes the fraud allegations.
• Work with a life insurance attorney to defend against these claims.

Conclusion: Don’t Accept a Denial Without a Fight

Life insurance claim denials are often based on technicalities, misunderstandings, or incomplete information. By understanding the reasons behind the denial and taking proactive steps to address them, you can significantly improve your chances of successfully overturning the decision.

If your claim has been denied, contact the Law Offices of Jason Turchin. We have extensive experience helping beneficiaries resolve life insurance disputes. Call us today at 800-337-7755 or chat with us live. Let us help you get the benefits you deserve.