February 28, 2024

Why a Life Insurance Claim May Get Denied?

Life insurance provides financial aid to your loved ones when you, unfortunately, pass away. It is the best way to secure the future of your loved ones
Life Insurance-Image Credit-By ImageSource

Life insurance provides financial aid to your loved ones when you, unfortunately, pass away. It is the best way to secure the future of your loved ones.

Life insurance offers peace of mind to the policyholder. What most policyholders don’t know is that when their loved ones do claim insurance money, it may get denied.

Yes, claim rejections are more common than you think. Hiring a life insurance attorney can be helpful if the insurance company has rejected your claim. These attorneys can review your policy and reasons for rejection and appeal the insurance company’s decision.

The Basics of Life Insurance

Basically, life insurance is an agreement between you, the policyholder, and the insurance company.

The agreement is that if you pay a premium, your nominee will get a certain sum in the event of your death. This sum can help your loved one financially when you are not there.

Life insurance has two primary categories:

  • Term life insurance: This is the simplest form of life insurance policy. In this policy, the nominee will get a sum in the event of your death within the policy period. The policy period can be 10, 20, or 30 years
  • Permanent life insurance: This policy provides coverage to the policyholder whenever they die. In addition, this policy has a cash value component that grows over time and can be used by the policyholder during their lifetime

The Problems in Claiming Insurance

You need to understand that insurance agencies are for-profit organizations. They get nothing out of approving your claim. However, they benefit from rejecting your claim. So, of course, they will reject your claim.

They will try their best to find a measly reason to deny your claim. Here are some reasons why your claim may be rejected:

  • Misinformation
  • Not disclosing medical history
  • Policy expiry
  • Missed premiums
  • Death by suicide


When you fill out the form, you need to be 100% honest. Not disclosing important information can lead to claim rejection.

Being honest can increase the premium rates a bit, but you will not face any problems when claiming insurance.

Including lifestyle habits like smoking is also important when you fill out the form.

Not Disclosing Medical History

If you die of a heart attack, the insurance company may reject your loved one’s claim, saying that you didn’t disclose your heart condition.

Disclosing any medical condition you have is important. Again, it may lead to higher premium rates, but your loved one will not have any problems claiming the money.

Serious mature legal advisor reading, analyzing, and explaining documents to female customers. Man and woman sitting at table and reading papers. Expertise and paperwork concept-Image Credit-Image By pch.vector on Freepik

Policy Expiry

The claim may be denied if the policy has expired. As said, a term life insurance policy is valid only for a certain period of time. If you have taken a term policy of 30 years, your loved one will get money only if you pass away within this time.

You need to renew your policy if it has expired for a higher premium rate if you would like to continue with the policy.

Missed Premiums

Missed premiums can lead to policy lapses. Not paying the premiums is one of the most common reasons for policy lapses. Your loved one cannot claim compensation if your policy lapses.

Death by Suicide

Insurance companies don’t cover death by suicide. Most agencies will have a suicide clause for life insurance. According to this clause, the insurance company will not pay for death by suicide for the first two years. After that, they usually cover death by suicide too.

Final Thoughts

Insurance claim rejections are not the end of the world. You have the option of appealing the insurance company’s decision. However, it is best to seek the help of a life insurance attorney, as the appeal process can be complex and you can’t afford to lose.

Blog By Andrew



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