Although most insurers publicly state they honor COVID-19 death claims, denials still happen. In our experience handling these disputes, rejections are rarely about the virus itself—they’re usually tied to policy fine print or perceived issues with the application. If you need help with denied life insurance in Wisconsin call us.
Common Reasons Life Insurance Denies COVID-19 Claims
1. The Policy Only Covered Accidental Death
COVID-19 is a natural illness, not an accident. If the deceased only had an Accidental Death & Dismemberment (AD&D) policy—and no traditional life insurance—the claim will be denied. AD&D does not pay for deaths caused by disease.
2. Misrepresentations or Omissions on the Application
Life insurance policies are based on full disclosure. If the insurer finds that the policyholder failed to mention a medical condition, prior COVID diagnosis, or smoking status—especially during the first two years of the policy—they may claim the policy was obtained under false pretenses. This contestability period is a common ground for denial.
3. The Policy Lapsed Due to Missed Premiums
If the insured missed a payment—especially while hospitalized with COVID-19—the policy could have lapsed. Insurers are required to offer a grace period (typically 30–60 days), but unless the policy was reinstated before death, the claim could be denied. Some states extended grace periods during the pandemic, but these protections vary and may not apply retroactively.
4. Small Mistakes on the Application
Even honest errors—like listing the wrong pharmacy or forgetting a short-term medication—can trigger an investigation. Insurers may argue these omissions were material and grounds for rescinding the policy, especially if the death occurs within the contestability window.
5. Undisclosed Smoking or High-Risk Conditions
If the insured failed to disclose smoking, obesity, or chronic respiratory issues, the insurer may claim these omissions changed the risk level. Even when COVID-19 is the cause of death, such discrepancies are often cited to void the policy.
What Is the Contestability Period and How Does It Affect COVID Claims?
Most life insurance policies include a two-year contestability period. If the policyholder dies during this time, the insurer can scrutinize the application for misstatements or omissions—even ones unrelated to the cause of death. COVID-19 deaths during this window often prompt in-depth reviews of medical history, travel, or lifestyle choices.
While intentional fraud can justify denial, honest mistakes typically do not. Courts have sided with beneficiaries when insurers attempted to exploit immaterial errors to avoid paying out.
Can an Insurer Act in Bad Faith When Denying a COVID Claim?
Yes, and it happens more often than most realize. Insurers are legally required to:
Promptly investigate claims
Communicate clearly with beneficiaries
Avoid stalling or misrepresenting policy terms
Bad faith behavior includes denying valid claims, delaying payouts without reason, or inventing pretexts to avoid liability. If an insurer wrongfully denies a claim, you may be entitled to more than the policy value, including punitive damages and attorney’s fees.
Red Flags That Suggest Bad Faith Denial
Claiming misrepresentation based on trivial or unrelated errors
Delaying communication or demanding redundant paperwork
Reclassifying the death as “non-covered” without medical basis
Ignoring documents submitted by the beneficiary
If any of these apply to your denial, legal intervention is essential.
How an Attorney Can Help With a Denied COVID Life Insurance Claim
COVID-related denials are often rooted in vague language, procedural traps, or unfair policy rescissions. A life insurance attorney can:
Review the policy and all relevant rider terms
Assess whether the application error was truly material
File a formal appeal with compelling legal support
Negotiate with the insurer or pursue litigation if necessary
We’ve recovered benefits in cases where insurers cited contestability, lapse, or alleged fraud—when in reality, the denial was unfounded.