What kinds of deaths are not covered by life insurance?

Life insurance provides vital financial protection to your loved ones when you die. Your policy pays a death benefit to your beneficiary for any cause of death, including natural causes and accidents. The circumstances around the death, rather than the actual cause of death, can sometimes invalidate a policy. This happens rarely, in cases of fraud, illegal activity, or when there is a known policy exclusion.

Read on to learn more about the causes of death that life insurance will and won’t cover and how you can make sure your family receives the full death benefit.

When life insurance does not pay

If you keep up with your premiums and die while your policy is active, your life insurance beneficiary will get a payout from your insurer. But there are some situations when the life insurance company may withhold a death benefit:

Lying

If you commit life insurance fraud on your insurance application and lie about any risky hobbies, medical conditions, travel plans, or your family health history, the insurance company can refuse to pay the death benefit. Being honest and thorough during the underwriting process is the best way to ensure that there are no surprises later.

Risky hobbies

If you die participating in a dangerous activity you regularly enjoy (like flying a private plane, bungee jumping, or scuba diving) your insurer may not pay the death benefit, depending on the details of your policy.

If your hobby poses enough of a risk, your insurer may add an exclusion to your policy that prohibits payment if you die doing said risky activity. Amateur pilots, for example, may need to have an aviation exclusion rider to get life insurance coverage. If they die in a flying accident, their beneficiaries won’t get the death benefit. You'll know about this exclusion before you sign the policy.

Murder

If the beneficiary of a policy murders the insured, they won’t get the death benefit due to the slayer rule. The slayer rule prevents a payout to anyone who murdered — or is closely tied to the murder — of the person insured. Instead, the insurance company will pay the death benefit to your contingent beneficiaries or your estate.

Deaths that occur while you're doing something illegal may be excluded in your policy, too. This varies by insurer, so check your policy for details.

Suicide

Suicide is typically covered under life insurance, with one caveat: Life insurance policies have a suicide clause that prohibits a payout for death by suicide in the first two years of the policy.

Insurance companies have suicide clauses in place so that applicants cannot take their own lives immediately after their life insurance policy goes in force. This gets complicated in certain scenarios, such as a drug overdose. Life insurance companies can deny coverage in the case of a drug overdose, but they’ll need to prove that the overdose was deliberate to deny the death benefit.

If you or someone you know is in crisis, you can reach the National Suicide Prevention Lifeline by calling or texting 988. The service is free and available 24 hours a day, seven days a week. The deaf and hard of hearing can contact the Lifeline via TTY by using your preferred relay service or dialing 711 then 988. All calls are confidential.

Acts of war or terrorism

Some insurance companies include an exclusion in their policies for deaths caused by war or terrorism. It's less common to see this exclusion in life insurance than in other types of insurance, however. Many of Policygenius’ partner insurers will pay the death benefit in this scenario.

This is slightly more complicated if you're an active member of the military. Whether you qualify for a private life insurance policy will depend on your rank and your current deployment status. Ask your insurance agent for clarification if you have questions about this exclusion.

What happens to a life insurance policy with no beneficiary?

There are two additional scenarios where the death benefit payout can get tricky: if you don’t list any beneficiaries in your life insurance policy or if your beneficiaries predecease you.

If you don’t list any primary or contingent beneficiaries

If you don’t list any beneficiaries in your policy, the benefit goes to your estate instead, making it more difficult for your loved ones to receive a payout.

Without any beneficiaries, the money has to go through probate, a long process where a court decides who should get your assets. Your beneficiaries may also have to pay estate taxes on the benefit if it goes to your estate.

If your beneficiaries predecease you

If your beneficiaries die before you, the same obstacles apply as if you didn’t select beneficiaries at all — your life insurance benefit is paid to your estate and your loved ones aren't guaranteed the money.

You can make sure that your family is financially protected by updating your policy’s beneficiaries with every big life event — such as a death in the family or the birth of a child.

Eligible beneficiaries

Any living person or active organization you list as your beneficiary can get a life insurance payout if you die for any reason not listed above. This includes people who are incarcerated or unemployed, nonprofit organizations, and charities. As long as your beneficiaries have a bank routing number or mailing address to receive paper checks, you can rest assured they will be taken care of when you’re gone.

To ensure your beneficiaries don’t face obstacles when claiming their payout, include as much information about them as possible when you first name them as a beneficiary, including their social security number, full name, relationship to you, and how the death benefit should be distributed.

What does life insurance cover?

Life insurance policies cover deaths due to an illness, accident, or natural causes. As long as you avoid the exceptions detailed above, your beneficiaries will get the life insurance payout when you die. That includes:

• Natural causes: Heart attack, infection, kidney failure, stroke, old age, cancer, or any other natural cause

• Accidental death: Accidental drug overdose, motor vehicle accident, poisoning, drowning, or any other tragedy

• Pandemic-related illness: Pandemic-related illness such as coronavirus is categorized as a natural cause

• Suicide after two years: As long as the period covered by the suicide clause has elapsed

• Murder: As long your beneficiaries weren’t involved, regardless of how you were killed and if your death is ruled manslaughter or homicide

If you are honest on your application and pay your premiums on time, your beneficiaries will be covered when you die. If you have specific questions, reach out to a Policygenius agent for free to learn more about deaths covered by term life insurance.