Denied Life Insurance Claim?

life insurance claim

Your client purchased a life insurance policy to ensure that the financial future of their loved ones was stable. It would be devastating to discover that they were left with nothing. Here are some reasons why they might be struck with a denied life insurance claim.

Death During Contestability Period

The contestability period lasts about two years, and if your client were to perish during this time, there would be an investigation into the validity of their insurance application. If they were to find anything suspicious or false, the insurance company would have the right to deny the claim.

Lapsed Policy

Insurance companies can sometimes be very strict when it comes to the terms of a policy. Allowing a policy to lapse is a sure-fire way to lose a life insurance claim. It is not the end of the world if your client misses a payment. Just make sure they put it in before the grace period expires. The grace period is 30 days after the payment is due and is when they can still make a payment without consequence. Advise your client to look into auto-scheduling payments if they have a hard time remembering.

Failure to Disclose Relevant Information

The most common reason insurance providers give for denying a claim is the failure to disclose relevant personal information. The insurer will make the argument that they did not have all the necessary information to determine if they wanted to risk the payout. Your client should not worry if they accidentally put the wrong address or phone number. Those are just considered errors and will not affect the policy. Getting a doctor to lie on a medical exam is way more serious and grounds for denial.

Death Type Not Covered

The type of death not being covered is another reason your client’s life insurance claim might be denied. Suicide in the contestability period of the policy is one of the most common. The claim can be rejected if your client were to take their own life during that time. But after two years, that exclusion is usually dropped. High-risk activities like sky diving, scuba diving, and even some jobs are not covered under some policies. Make sure you speak to your client if any of those things apply to them.

How To Avoid Being Denied

Here are some tips you can share with your client so they can avoid a denied life insurance claim.

Honest Application

Being honest and transparent on their application is a simple way of ensuring there is no trouble with the insurance providers. Make sure they take their time and review their answers. Accidentally omitting information may be used as an excuse to avoid paying out.

Read Insurance Policy Clearly

Reading through important paperwork carefully is highly advised. This is especially true with a life insurance policy. Your client may have trouble understanding all the terms and concepts. So, make sure you take the time to help them gain clarity on their policy. Help them understand what is being covered and what is not.

Make Premium Payments

It only takes one missed payment to have a policy canceled. Speak to your client about setting up automatic payments. It’s a simple countermeasure that will ensure they always pay their premium on time and never mistakenly miss a payment.


We hope this information on denied life insurance claims is helpful to you.

Empower Brokerage is dedicated to helping you educate your clients on the insurance they need and staying on top of their health. Whether it’s through webinar training, one-on-one calls, seminars, or marketing plans. We want you to be successful. Give us a call if you have any questions at 888-539-1633.

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