What to do if your life insurance claim is denied

Insurers rarely deny life insurance claims, but it can happen. Here’s why some claims are rejected and how to appeal the decision.

Amanda Shih author photoRebecca Shoenthal author photo

By

Amanda Shih

Amanda Shih

Editor & Licensed Insurance Expert

Amanda Shih is an insurance editor and licensed Life, Health, and Disability agent at Policygenius in New York City. Her work has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

&

Rebecca Shoenthal

Rebecca Shoenthal

Licensed Insurance Expert

Rebecca Shoenthal is an insurance editor and licensed Life, Health, and Disability agent at Policygenius in New York City. Previously, she worked as a nonfiction book editor. She has a B.A. in Media and Journalism from the University of North Carolina at Chapel Hill.

Updated August 27, 2021|2 min read

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It’s very rare for a life insurance company to deny a policy claim — at the end of 2019, only 0.02% of life insurance payouts were reportedly delayed or denied. [1] However, it’s not impossible. A life insurer might deny the death benefit if the policyholder missed payments for their coverage or based on the cause of death, among other reasons.

If your claim is rejected, the insurer will refund the premiums paid into the policy and cancel it. You can appeal the denial by talking to the provider, but it’s unlikely that will change anything unless there’s been a legitimate error.

Key Takeaways

  • Claims are denied only in specific circumstances, like if the insured lied on their application

  • The insurer will provide a clear explanation of why they denied the claim

  • It’s not worth contesting a denial unless you have evidence that there’s been an error

  • Your state insurance department or lawyer can help you contest the denial, but you can also appeal it on your own

Why do life insurance claims get denied?

 Life insurance companies deny claims if the policyowner:

  • Died by suicide: Insurers won’t pay out for death caused by self-harm in the first two years of a policy.

  • Died doing an excluded activity: Policies won’t cover someone dying while committing a crime or any other activity explicitly excluded in their policy.

  • Lied on their application: The benefit could be reduced or completely denied if any information was intentionally misrepresented on the application.

  • Stopped paying their premiums: Once you miss multiple premium payments, your policy is canceled

"If someone's claim is denied, there’s going to be a very clear reason why," says Jake Herskovits, a life insurance sales specialist at Policygenius. "Maybe they’re not the beneficiary that’s listed or the person died by suicide in the first two years." Beyond that, Herskovits says, it's unlikely you'll ever have a claim denied.

If your claim is denied for any of the reasons above, you won’t have much success appealing the provider’s decision. Life insurance policies include language that voids your coverage for non-payment or if you lied during the application process. 

→ Learn more about when life insurance companies won’t pay out

What to do if your life insurance claim is denied

When a provider denies your life insurance claim, you’ll get a written notice explaining their decision in detail. If you think your claim was wrongly denied, start with a call to the insurance company.

Contact the insurer

Your insurance provider can answer questions about your claim and explain their appeals process. You’ll usually need to present proof to support your appeal, such as: 

  • Autopsy report

  • Medical documents

  • Proof of premium payments

The insurance company can tell you what paperwork you need.

Appeal the rejection

If you feel you have a solid case and want to appeal your denied life insurance claim, you can:

  • Contest the decision with the insurer directly (most affordable, but stressful to navigate while grieving)

  • Get free help from your state department of insurance or attorney general (will give your appeal more weight, but could take longer)

  • Hire a lawyer to make your appeal or prepare a lawsuit (efficient, but can be costly)

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How to protect your beneficiaries from a claim denial

There are a few simple things you can do to ensure your loved ones won’t have their claims rejected when you pass away:

  • Automate your payments: Set your premiums to be paid automatically so you never have to worry about missing a bill and losing your coverage.

  • Be honest on your application: Don’t conceal anything when you’re buying your policy. 

  • Keep your policy up-to-date: Update your beneficiaries after major life events and make sure that their contact information is correct.

  • Share your plans: Your beneficiaries should know that you have life insurance, where to find the policy and other paperwork they’ll need, and how to file a claim.

It’s natural to feel some anxiety that your death claim could be denied. But for most people, who are honest when applying and die of natural causes, it’ll never be an issue.

If your claim is denied, make sure you can prove that there was an error on the insurer’s part before trying to appeal. Otherwise, contesting a rejection is not worth the time or effort.

Still have questions about life insurance claims? A Policygenius agent can help.

Life insurance claim denial FAQ:

Why are life insurance claims denied?

A claim can be rejected if the policyholder stopped paying premiums, lied on their application, died by suicide within the first few years of the policy, or died while committing a crime.

How often do life insurance companies deny claims?

Less than 1% of the time. If the policyholder was honest on the application and paid their premiums, there should be no issues.

Can I dispute a life insurance claim denial?

You can appeal directly with the provider, but that’s only a good idea if you have proof that there was a mistake.

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