Life insurance is meant to offer peace of mind. You buy it so your family has financial security if something unexpected happens. Whether it’s to cover the mortgage, pay for funeral costs, or support your children’s future, life insurance can be a financial lifeline for your loved ones. But here’s the hard truth: many families never receive the payout they’re counting on because the claim is denied. Too often, simple mistakes on the application or misunderstandings of policy exclusions cause beneficiaries to face a flat-out denial just when they need help the most. Here’s how to avoid common pitfalls that lead to denied life insurance claims—and how to make sure your loved ones aren’t left with nothing. When you need a Wisconsin life insurance denial attorney call our firm.
1. Lying or Leaving Out Important Information
It’s tempting to make yourself look healthier than you are when filling out a life insurance application. But omitting a past surgery, failing to disclose a chronic condition, or understating your tobacco use can cost your family everything. Insurance companies can investigate your records after your death, especially during the contestability period (typically the first two years), and if they find discrepancies, they’ll use them to avoid paying the claim. Example: A man in Texas died in a boating accident 16 months after buying a life insurance policy. The insurer found that he had failed to report his past treatment for high blood pressure—even though it played no role in his death. The company denied the claim based on “material misrepresentation.”
2. Not Disclosing Alcohol or Drug Use
Many policies include exclusions related to substance use. If you die in circumstances where alcohol or drugs are involved—even legally prescribed medication—you could trigger an exclusion. And insurers don’t need proof that substances caused the death; just their presence in your system may be enough. Example: A 38-year-old woman in California died in a fall at home. A toxicology report revealed she had taken a friend’s painkillers not prescribed to her. Although the pills didn’t contribute to her fall, the insurer denied the claim, citing an exclusion for illegal drug use.
3. Suicide and Self-Inflicted Harm
Most policies exclude suicide coverage for the first two years. This clause is known as the suicide exclusion period. If someone dies by suicide during this window, the insurer can refuse to pay the benefit—even if premiums were paid faithfully. Example: A family in Ohio was devastated when their son's suicide was met with a denied claim. He had purchased the policy 13 months prior. Despite paying premiums for over a year, the insurer invoked the suicide clause and returned only the premiums, not the death benefit.
4. Losing Coverage After Leaving a Job
Employer-sponsored life insurance is a common benefit, but it doesn’t always follow you after you leave your job. If you get laid off, retire, or change employers, your policy might end without warning—leaving you with no coverage and your family with no safety net. Example: A man in Illinois believed he had life insurance through work, but when he died suddenly a year after retiring, his family learned the group policy had lapsed. There was no private policy in place, and the employer-sponsored one had quietly ended.
5. Choosing Coverage That Falls Short
Low-cost premiums can be attractive, but if your coverage doesn’t match your actual financial obligations, your family may still face hardship. A $50,000 policy might not go far if your family is left with debt, college expenses, or long-term care needs. Example: A mother of three in Florida passed away with a $25,000 policy through work. After covering funeral expenses, her family had little left to cover their rent, food, or utilities. The policy wasn’t enough to sustain them—and no supplemental private coverage had been added.
How to Prevent Life Insurance Claim Denials
To reduce the risk of your claim being denied: Tell the truth. Always disclose your full health history, medications, doctor visits, and habits like smoking or drinking—even if they seem minor. Review exclusions. Understand what your policy won’t cover, especially during the contestability and suicide periods. Secure private coverage. Don’t rely solely on group policies through work. Private policies stay with you no matter your job status. Update as life changes. Major life events—marriage, kids, divorce, job changes—should prompt you to review and update your policy and beneficiaries. Don’t delay. If your health declines, it could affect your insurability. Apply while you're healthy to lock in affordable rates.
What to Do If a Claim Is Denied
If your family has already experienced a denied or delayed life insurance claim, don’t assume the insurer’s decision is final. Many denials are reversed with proper legal action. Our experienced life insurance lawyers handle all types of disputes—from misrepresentation accusations and contestability claims to suicide exclusions and lapsed policies. We’ve recovered millions for families across the country who were wrongly denied the money their loved one intended them to have. Example: A widow in Georgia was denied a $250,000 payout because her husband failed to disclose a past anxiety diagnosis. Our team proved the condition was mild and unrelated to his accidental death. The insurer settled the full amount after we filed suit. Don’t let an insurance company take advantage of your grief. Contact us today for a free consultation—and let us help you fight for the benefits your family deserves.
Frequently Asked Questions
Can life insurance be denied if the policyholder accidentally left out a minor medical condition on the application?
Yes, but only if the omission is considered "material" to the insurer’s decision to issue the policy. If the overlooked condition had nothing to do with the death and wasn’t intentionally concealed, the denial can often be overturned. Example: A Minnesota man forgot to mention mild sleep apnea when applying for coverage. After he died in a hiking accident, the insurer denied the claim. The family’s attorney demonstrated the condition was irrelevant to the death, and the claim was ultimately paid.
What happens if someone dies with drugs or alcohol in their system and the life insurance policy has a substance exclusion clause?
If the policy includes a drug or alcohol exclusion and the insured dies with substances in their system, the insurer may deny the claim—even if the substances didn’t directly cause the death. These clauses are especially strict during the contestability period. Example: A woman in Nevada died of a stroke, but trace amounts of THC were found in her bloodstream. Her insurer denied the claim citing a substance exclusion. Her son challenged it, arguing the marijuana was not a factor in her death, and a settlement was reached.
Does a suicide within two years of starting a life insurance policy automatically result in claim denial?
Most policies include a suicide exclusion for the first two years. If the insured dies by suicide during this period, the insurer usually returns only the premiums paid—not the full death benefit. After that period, suicide is typically covered. Example: A 29-year-old in New Hampshire died 15 months after purchasing a policy. The insurer denied the $500,000 claim under the suicide exclusion. The family received a refund of premiums but no benefit.
Will my employer-provided life insurance policy still protect my family if I get laid off or change jobs?
Usually not. Most group life insurance policies end when your employment does. If you don’t convert the policy or purchase private coverage, your family could be left unprotected. Example: A Michigan man was laid off during the pandemic and died eight months later. His spouse filed a claim, only to find out his coverage had ended when his employment did.
Can a denied life insurance claim be overturned if the reason is unclear or seems unfair?
Yes. Many claim denials are based on vague policy terms or errors in the insurer’s review process. If the denial lacks sufficient justification, beneficiaries can challenge it and often succeed with legal assistance. Example: A denied claim in Missouri cited "undisclosed anxiety" despite the insured having reported all prescriptions. Legal review showed the insurer failed to investigate properly, and the claim was reinstated.
If the cause of death has nothing to do with what was left off the life insurance application, can the claim still be denied?
Insurers can deny a claim during the contestability period if they find application discrepancies, even if unrelated to the cause of death. However, these denials are often overturned when challenged in court. Example: A California man died in a motorcycle crash. The insurer discovered he hadn’t listed gallbladder surgery from years earlier and denied the claim. His family proved the omission was irrelevant, and the court ordered payment.
What can beneficiaries do if a life insurance claim is denied after the insured changed jobs and didn’t realize coverage ended?
Beneficiaries should check whether the policy included any conversion or portability options and consult a life insurance attorney. There may be grounds for legal recovery if the insurer or employer failed to properly notify the insured of coverage termination. Example: A woman in North Carolina died three months after starting a new job. Her husband assumed her prior employer’s coverage was still in place. An attorney proved the employer failed to inform her of expiration, and the insurer agreed to pay out the benefit.
How long does a life insurance company have to deny a claim based on misrepresentation?
Generally, insurers can contest a claim only during the two-year contestability period, unless the misrepresentation was fraudulent. After that period, most policies are considered incontestable. Example: A Florida policyholder died four years after approval. The insurer attempted to deny the claim over a missed prescription disclosure. Legal counsel pointed to the expired contestability period, and the full benefit was paid.
Can a life insurance policy be canceled after death if the insurer claims fraud in the application?
Yes, but only under strict legal standards. The insurer must prove the insured knowingly and intentionally misled them. Even then, they must follow formal rescission procedures to cancel the policy. Example: A man in Illinois died of a brain aneurysm. The insurer attempted to rescind the policy, citing undisclosed counseling visits. The court ruled that the visits were unrelated to the cause of death and did not meet the threshold for fraud.
Is legal help necessary to fight a denied life insurance claim, or can beneficiaries handle it alone?
While it's possible to dispute a claim independently, insurance companies have vast resources and legal teams. Hiring an experienced life insurance lawyer often results in faster resolutions and higher recovery. Example: A family in Arizona received a vague denial letter. After six months of silence, they hired a lawyer who uncovered a mishandled investigation. Within weeks, the insurer reversed the denial and paid the claim in full.