Life insurance is meant to provide financial security to families after the loss of a loved one. But when the claim is unexpectedly denied, it can create a second wave of shock and financial instability. While insurers claim denials are rare, the reality is that many beneficiaries are blindsided—often by vague policy language or technicalities that seem unfair.
Understanding the most common reasons for life insurance claim denials can help you determine whether the denial is legally valid—or if you’re being unfairly denied benefits that should be paid.
Top Reasons Life Insurance Companies Deny Claims
1. Material Misstatements on the Application
This is the most frequently cited reason for claim denial. A material misstatement refers to incorrect or omitted information on the original application—such as failing to disclose a pre-existing condition, stating the wrong weight, or claiming non-smoker status while occasionally smoking.
But here’s what insurers often don’t admit:
Not all errors are material.
The insurer must prove the misstatement directly impacted the approval or premium decision.
Many denials based on small or unrelated inaccuracies can be successfully challenged.
Example: A man’s family was denied a $400,000 claim due to an omission of cholesterol medication. The cause of death was unrelated. With legal help, the insurer reversed its decision and paid in full.
2. Alleged Policy Lapse for Non-Payment
Insurers commonly claim that the policy was no longer in force due to missed premium payments. However, policies typically include a grace period of 30–60 days. If the insured passed away during that window, the policy may still be valid.
Additionally, administrative errors—such as failed autopay drafts or employer mismanagement of group policy premiums—can result in wrongful lapse determinations. Legal review often reveals that the policy was still active at the time of death.
3. Cause of Death Not Covered Under the Policy
Certain causes of death may be excluded, especially under Accidental Death and Dismemberment (AD&D) policies. Common exclusions include suicide (within the first 1–2 years), drug or alcohol-related deaths, and hazardous activities like skydiving or racing.
But insurers often overreach, reclassifying accidental deaths as intentional or arguing the death falls into a vague exclusion. In many cases, the policy language is ambiguous or the facts of death don’t fit the exclusion being cited. These denials are frequently overturned.
Example: A woman’s AD&D claim was denied when her husband’s fall was labeled a suicide. The family contested the ruling, citing an autopsy and toxicology report showing no signs of intent. The insurer ultimately paid the claim in full.
Denied Life Insurance Claims Add Financial and Emotional Strain
A denied claim doesn’t just block a payout—it compounds the pain of losing a loved one. Life insurance benefits are often intended to cover funeral costs, pay off debt, replace income, and protect children and dependents. When a claim is denied, families are left to navigate both grief and financial uncertainty.
Many beneficiaries believe there’s no way to fight back, especially when they're emotionally overwhelmed. But in reality, most denials can be challenged—and often reversed—with the help of a knowledgeable attorney.
How a Life Insurance Denial Lawyer Can Help
If your claim has been denied, hiring an experienced life insurance attorney can make all the difference. These cases involve interpreting complex policy terms, proving the insured’s intentions, and confronting insurers with their own inconsistencies.
An attorney who focuses on life insurance claim denials can:
Review your denial letter and analyze the policy terms
Investigate the true cause of death and compare it to claimed exclusions
Dispute alleged misstatements or prove they weren’t material
Identify violations of state law or ERISA if the policy was employer-sponsored
File a detailed legal appeal or lawsuit to recover the benefits
Our legal team prepares in-depth case files—often exceeding 100 pages—to challenge denials from insurers like MetLife, Prudential, AIG, Lincoln, Colonial Penn, and others. We’ve recovered millions in wrongfully denied life insurance benefits.
Don’t Accept a Life Insurance Denial Without a Second Opinion
A denial letter is not the final word. Insurance companies are counting on you to walk away quietly. But with legal advocacy, you may be able to reverse the decision, recover full benefits, and even pursue interest or penalties if the denial was in bad faith. When you need legal help for life insurance disputes in North Dakota call us.
Schedule a free consultation today with an attorney who specializes in life insurance claim disputes. We’ll review your case at no cost and explain your legal options clearly and compassionately. You only pay if we win your case.
Don’t let a denied claim rob your family of the security your loved one intended. Let us fight for what you’re rightfully owed.