There can be many reasons why your selected insurer may deny a claim on your payout. To avoid this problem, I advise you to go through the most common reasons why insurance companies may deny a life policy claim to your beneficiary.

Reasons Life Insurance Companies deny claims

Not divulging medical conditions and lifestyle information truthfully

What may your insurer need and why:


Most jobs are not considered risky, but some are treated differently. For example, some of the most obvious occupations that may be considered riskier than others are police officer, firefighter, diver, someone working on extreme heights, miner... 

High-risk hobbies

But it is not just your occupation; even your hobbies are sorted by risk factor. Do you like to skydive, drive a race car, mountain climb, or are you perhaps in reserve in the armed forces? All this is considered high-risk and will be taken into account in your underwriting. 

Risky Behavior is reason for denied insurance policy claim


Here, the insurers are mostly interested in your drinking habits and smoking status. Keep in mind that most insurers consider vaping to be the same as smoking. 

Medical status

Insurers may ask you about your family medical history, especially about any hereditary diseases, as this helps them predict your future chances of critical or terminal illnesses. But keep in mind that they are also interested in your current health status and any potential medication you are taking. 

Unpaid premiums

Life insurance is a contract between you and the insurance provider. As with any contract, this brings legal obligations to both parties. Yours are to pay your premiums on time, not withhold any information, and be honest with them. And the obligation of your insurer is to pay out your claim.

Knowing your “grace period” may save you from troubles in case you face financial difficulties. You can find out more about what a grace period is in our life insurance dictionary section.

life insurance premiums needs to be paid for a policy claim


Life insurance companies could reject and claim damages if the death happened because of suicide during the two-year (in most cases) period of stability. A suicide clause is supposed to discourage people from buying life insurance when they are thinking about ending their own life. However, suicide does not always interfere with life insurance, and beneficiaries can get back the premiums that has been payed.

In general, if the policyholder dies during the dispute period, the death benefit may not be paid. However, most people do not realise that they can get a police report describing the cause of death. In addition, most insurers no longer consider euthanasia with the help of doctors to be "suicide."

Outliving the policy

If you have term life insurance, you could potentially survive the life of the policy, meaning there would be no death benefit.

If you need longer coverage, the insurer may allow you to renew your policy (at a higher premium) when you reach the deadline. You can also convert a term life insurance policy into a whole-of-life insurance policy, but there is a specific window of time in which you can do that. Make sure you know the dates and terms of your policy if you want to change it.

you can outlive long term life insurance policy

The type of death is not covered by your policy

Death due to war

War death exclusion was more common in the past, but some policies still mention it. It is not intended to exclude soldiers but to deny claims for civilians killed in war or military conflict.

Illegal activities

Most life insurance companies list illegal activities on a ban list. Such activities include drunk driving, deaths in speed violations and accidents without seatbelts, participation in illegal protests, and the use of illegal drugs and alcohol. If the insured dies because of any of these reasons, the insurance company may waive the right to pay the death benefits.

Life insurance claim does not pay for illegal activities


Life insurance does not cover homicide, with a few exceptions. For example, if the beneficiary is suspected of killing the policyholder, there is no benefit payout until further investigation. Likewise, insurance companies can deny claims if a policyholder is killed while participating in illegal or criminal activities.

Extreme activities

Insurance generally does not cover deaths from hazardous activities, recreation, or other causes. This can include anything from bungee jumping to race car driving to scuba diving. Even if a loved one frequently engages in such extreme activities and adventure sports but fails to mention it when purchasing the insurance products, the insurance company considers this a serious misstatement, which constitutes a claim, and the company can decline to pay the policy.

be honest about Extreme activities with your life insurance provider

Usually, only certain activities are excluded, so ready your policy thoroughly. For example, you may be entitled to benefits if your loved one dies in a BASE jumping accident but this exact activity is not mentioned in your policy exclusion list, whereas bungee jumping may be included on the list of dangerous activities.

No beneficiaries are known

Sometimes, our primary beneficiary dies before us, or we weren’t precise in stating to who we intend to leave our protection payout. You would be surprised by how many policies do not indicate to whom exactly the lump sum belongs. Some just say children, while in some cases, the beneficiary may still be a minor. If this occurs, the claim will be delayed. It also sometimes happens that an insured person forgets to notify the recipient about the protection they took out for them.

If for any reason you encounter problems with the payout, before giving up, I would recommend that you get in touch with your lawyer or companies that specialise in these types of situations, as that will give you a better chance to dispute any refusals and ensure you have a higher chance of claiming the payout that belongs to you.
Expert life insurance advive
Written by James Webb

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