What does life insurance cover?

Life insurance covers most causes of death, with a few exceptions, and can cover any of your beneficiary’s expenses.

Amanda Shih author photoRebecca Shoenthal author photo

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Amanda Shih

Amanda Shih

Editor & Licensed Life Insurance Expert

Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

&Rebecca Shoenthal

Rebecca Shoenthal

Editor & Licensed Life Insurance Expert

Rebecca Shoenthal is a licensed life, disability, and health insurance expert and a former editor at Policygenius. Her insights about life insurance and finance have appeared in The Wall Street Journal, Fox Business, The Balance, HerMoney, SBLI, and John Hancock.

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Life insurance companies pay a death benefit to your beneficiaries if you die from natural causes, an accident, suicide, or murder. There are some rare situations when you won't be covered by life insurance, like if you lied on your application.

Your beneficiaries can use the death benefit for anything, like a mortgage, college savings, or funeral expenses.

What does life insurance cover?

What’s covered by life insurance falls into two categories: the causes of death insured by your life insurance policy and the expenses the policy’s death benefit can go toward.

What causes of death are covered by life insurance?

Life insurance policies cover almost all deaths, with a few exclusions. As long as your policy is active when you die, life insurance providers will pay out if your death is caused by:

  • Natural causes: Like a heart attack, old age, or illnesses like cancer

  • An accident: Including accidental overdose from a prescribed medication

  • Suicide: As long as it occurs after the policy’s two-year suicide clause period ends 

  • Homicide: Unless the beneficiary played a role in the murder

  • War or terrorism: Usually — some insurers do include exclusions for these causes of death

What expenses are covered by life insurance?

Your beneficiaries can spend your policy’s death benefit however they want. Beneficiaries usually use the financial support for:

  • Everyday expenses: Like monthly bills, groceries, and other household essentials

  • Outstanding debts: Including a mortgage, credit card debt, private student loans, or auto loans 

  • Childcare: Replacing care provided by a spouse 

  • End-of-life expenses: Such as funeral expenses or end-of-life medical care

  • College costs: To fund continuing education for your spouse or tuition for your children

If you have certain policy add-ons called riders, you can withdraw part of the death benefit while you’re alive. You need to have a qualifying condition, such as a terminal illness or a disability, and the money can only go toward related medical costs.

→ Learn more about how to use life insurance proceeds

What is not covered by life insurance?

Your beneficiaries won’t get the death benefit if your policy is expired or in situations involving fraud, certain criminal activities, or policy exclusions:

  • Expired policies: Policies only stay active while you pay your premiums and as long as your policy’s term. If your coverage expires or lapses before you die, your beneficiaries don’t get the death benefit.

  • Exclusions: If you have a dangerous hobby, like skydiving, you can get cheaper coverage by adding an exclusion into your policy, but then the policy won’t pay out if your death is skydiving-related.

  • Fraud: If you lie on your life insurance application, your provider can cancel your policy while you’re alive or deny or reduce the payout when you pass away.

  • Criminal activity: If you die while committing a felony, your provider may not pay out. If a beneficiary commits a crime to try to get your insurance money, they’ll be denied a payout.

→ Learn more about when life insurance doesn’t pay out

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How quickly does a life insurance policy pay out?

Providers usually take two weeks to two months to process and pay out a claim after it’s been filed. Depending on your state, your local insurance department might require insurers to pay out within 30 to 60 days of receiving a claim. 

The payout can be delayed if you die within the first two years of the policy (the contestability period). During this time, your provider can review your application for intentional misrepresentations before approving the claim. A review could delay payment for up to 60 days.

Buying life insurance protects your loved ones from a worst-case scenario. As long as you’re honest on your application, your policy will cover almost any cause of death, leaving your family with financial assistance for any of their present and future needs.

Frequently asked questions

When does life insurance pay out?

Life insurance pays out the death benefit to your beneficiaries for most causes of death. Suicide, most accidents, and death by natural causes are all covered by life insurance.

What can life insurance pay for?

Beneficiaries can use life insurance funds any way they want. Many use the proceeds to pay for debts, funeral costs, or everyday expenses.

What is not covered by life insurance?

If you lie on your life insurance application, are murdered by your beneficiary, die by suicide during the suicide clause period, or die doing something that is excluded in your policy, your provider will not pay out.