Why Was My Life Insurance Claim Denied?
A life insurance claim is usually denied because the insurance company asserts that a policy provision, exclusion, or application issue applies to the death. In many cases, the denial is based on a broad or incorrect interpretation of the policy rather than clear proof that benefits are not owed.
A denial letter is not the final word. Many denied life insurance claims can be challenged and overturned.
How Insurance Companies Decide to Deny Claims
When a claim is submitted, insurers review the policy, the application, and the circumstances of death. If they believe they can justify nonpayment under the policy terms, they may issue a denial rather than request further information.
Denials often occur quickly, sometimes without a full or fair investigation.
The Most Common Reasons Insurers Give for Denial
Insurance companies typically rely on a limited set of justifications:
• Alleged misstatements or omissions on the application
• Death occurring during the contestability period
• Claimed lapse due to nonpayment of premiums
• Exclusions tied to the cause or manner of death
• Disputes over beneficiary designations
• Administrative or eligibility issues in employer sponsored policies
Some denials are valid. Many are not.
Application Misrepresentation Allegations
One of the most frequent denial reasons is alleged misrepresentation on the insurance application. Insurers may claim the policyholder failed to disclose medical history, medications, tobacco use, or other information.
Not every error qualifies as misrepresentation. Minor inaccuracies, information unrelated to the cause of death, or mistakes made by an insurance agent may not justify denial.
Contestability Period Denials
Most life insurance policies contain a contestability period, usually the first two years after the policy is issued. During this time, insurers may review the application more aggressively.
Even during this period, the insurer must prove that any misrepresentation was material and relevant. A claim cannot be denied solely because the policy was new.
Policy Lapse Claims
Another common denial involves allegations that the policy lapsed before death. These denials often hinge on:
• Whether proper premium notices were sent
• Whether grace periods were honored
• Automatic payment or billing failures
• Administrative errors by the insurer or employer
Lapse denials are frequently challenged successfully when notice requirements were not met.
Exclusions Based on Cause of Death
Some denials rely on exclusions related to the cause or manner of death, such as intoxication, risky activities, or alleged self harm.
Policy exclusions are typically interpreted narrowly. The insurer bears the burden of proving that an exclusion clearly applies under the specific facts.
Beneficiary and Ownership Issues
Claims may also be denied or stalled due to disputes involving:
• Conflicting beneficiary designations
• Alleged invalid beneficiary changes
• Claims by former spouses or family members
These situations often require additional legal review and do not automatically mean benefits are lost.
Does a Denial Mean the Claim Is Over?
No. A denied life insurance claim is often just the beginning of the process. Many denials are reversed through appeals, additional investigation, or legal action.
Insurers do not always get the final word.
What to Do After a Life Insurance Claim Is Denied
If your claim has been denied:
• Request the denial letter and policy in writing
• Identify the specific reason given for denial
• Preserve all correspondence and documents
• Do not assume the denial is final
• Avoid submitting appeals or statements without guidance
Early action helps prevent mistakes that insurers later rely on to uphold denials.
Related Guidance
For a broader discussion of how denied claims are handled and challenged, see our Denied Life Insurance Claim page and our Denied Life Insurance Claim Fact Sheet.
If a life insurance company has denied your claim, it may still be possible to recover the full policy benefits.
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Written & Reviewed by Christian Lassen, Esq., Nationally recognized life insurance lawyer: 25 years experience, hundreds of millions recovered. Quoted in The Wall Street Journal ( May 17, 2025).
Last reviewed: Jan 3, 2026 | Contact 800-330-2274
Our FAQ
Have questions? We are here to help. Still have questions or can't find the answer you need? Give us a call at 800-330-2274 today!
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A grace period is the time after a missed payment during which the policy remains in force, usually 30 to 60 days depending on state law and policy terms.
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No. In most states, insurers must send a written notice of overdue premiums and warn of pending lapse before terminating coverage.
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The policy may still be enforceable. Beneficiaries can challenge the lapse based on the insurer’s failure to provide required notice.
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Yes. If the insured dies during the grace period, the policy is still considered active, and benefits should be paid.
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Yes. In group life insurance policies, employers sometimes fail to forward premiums properly, leading to wrongful lapse denials.
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Yes. If automatic payment setups fail through no fault of the insured, lapses may be challenged.
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Some policies automatically borrow against cash value to cover missed payments. Failure to apply this correctly can lead to wrongful lapse claims.
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Possibly. Some courts excuse nonpayment if the insured was mentally incapacitated and missed premiums without proper notice.
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No. Reinstatement must occur while the insured is alive, but wrongful lapse denials can still be challenged posthumously.
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Not without following strict notice and grace period rules. Beneficiaries can often challenge technical denials.
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Deadlines vary by state, but it’s critical to act within 1 to 5 years depending on the policy and jurisdiction.
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Not necessarily. Payments mailed within grace periods or accepted by insurers may keep coverage active.
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Bank records, payment receipts, insurer correspondence, and premium notices are key evidence.
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If the insurer used an outdated address despite updated information, lapse denials can often be overturned.
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Possibly. If the insured submitted a reinstatement application before death, it may help challenge a lapse denial.
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In some states, special grace periods and protections applied during COVID-19 emergencies. They can help fight wrongful lapses.
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Only if the insurer followed all legal notice and grace period requirements. Otherwise, beneficiaries may still recover.
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Misapplied premiums can lead to wrongful lapses — and courts often hold insurers accountable for these errors.
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An attorney can obtain records, challenge improper lapses, negotiate settlements, and litigate if necessary to enforce payment.
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The Right Choice for Your Claim
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“They tried to connect my father’s death to an undisclosed pre-existing condition. Christian's firm reviewed the full medical file and showed it had no bearing. Within a month, we had the check.”- Susan B.
Why The Lassen Law Firm Is Different
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Proven National Results
With over two decades of exclusive focus on life insurance litigation, we’ve helped thousands of families recover wrongfully denied benefits. Our reputation for fast, strategic resolutions has made us a trusted national resource for complex claim disputes.
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