Happy to announce a successful resolution of this denied Primamerica claim.
Life insurance claim denials can feel devastating, especially when families are counting on the payout. But many denials are based on technicalities, incomplete paperwork, or alleged misrepresentations that may be challenged. Below are 50 reasons life insurance claims are often denied, along with real-world examples that show how these denials happen and why legal help can make the difference. If you need a New York life insurance lawyer call us or we also have a NYC office.
Most Common Reasons Life Insurance Claims Get Denied
1. Policy lapsed due to nonpayment of premiums
A policyholder missed two premium payments after moving and not receiving mail. The insurer claimed the policy had lapsed, even though no warning was sent to the new address.
2. Policy was cancelled before the insured’s death
The insured voluntarily cancelled the policy while dealing with financial hardship. When he died unexpectedly a month later, the insurer denied the claim based on the cancellation.
3. Cause of death was excluded under the policy
A man died while mountain climbing. The insurer pointed to a clause excluding deaths during “hazardous recreational activities.”
4. False information was provided on the application
The insured denied having any history of cancer. After her death, medical records revealed she had been treated two years earlier.
5. Suicide during the contestability period
The policyholder died by suicide eight months after purchasing the policy. Most policies have a two-year exclusion for suicide, and the insurer applied that provision.
6. Death during a criminal act
A man was shot while participating in a robbery. The insurer denied the claim, citing the criminal activity exclusion.
7. High-risk activity not disclosed on application
An individual failed to disclose his BASE jumping hobby. When he died in a jump, the insurer argued he concealed a known risk.
8. Death while intoxicated by alcohol or drugs
The insured crashed his vehicle with a high blood alcohol level. The insurer denied the payout based on an intoxication exclusion.
9. Travel to a high-risk region
A journalist was killed in a conflict zone. The insurer denied the claim due to policy language excluding deaths in regions under travel advisories.
10. Policy not in force at time of death
A term life policy expired two weeks before the insured’s death. No renewal was completed, and the insurer denied the claim.
11. Waiting period not fulfilled
A guaranteed issue policy had a two-year waiting period. The insured died after one year, and the benefit was limited to premium refunds.
12. Invalid or incomplete beneficiary designation
The form listed “my children” without naming them. After the insured’s death, the insurer said the designation was too vague to process the claim.
13. Beneficiaries unaware of the policy
No one knew the insured had coverage until well after the deadline for filing. The insurer denied the claim for late submission.
14. Beneficiaries were minors without a legal guardian
The policy named the insured’s two minor children. Because no guardian or trust was listed, the claim was delayed and ultimately denied due to probate complications.
15. Legal dispute over beneficiary entitlement
An ex-wife and a current partner both claimed the benefit. The insurer filed an interpleader lawsuit and delayed payment for over a year.
16. Lapsed beneficiary designation
The named beneficiary was the insured’s employer, which no longer existed. With no contingent listed, the insurer denied the claim.
17. Group plan eligibility was lost
The insured left their job but didn’t convert their group life insurance to an individual plan. The coverage ended unknowingly.
18. Term life policy expired
A 10-year term policy ended two months before the death. No renewal was purchased, and the claim was denied.
19. Surrender of permanent policy for cash value
The insured cashed out a whole life policy during retirement. When they died two years later, there was no active coverage.
20. Joint life policy already paid out
The policy had paid the full death benefit after the first spouse died. When the second passed away, no remaining funds were available.
21. Key person no longer employed
A company had coverage for a key employee who had since retired. When he died, the insurer said the policy no longer applied.
22. Business dissolved before death
A buy-sell agreement policy became void after the business closed. When the partner died, the insurer cited lack of insurable interest.
23. Invalid buy-sell agreement
The agreement lacked formal signatures and funding. The insurer rejected the claim on the grounds the contract was unenforceable.
24. Improperly structured MEC
A modified endowment contract triggered tax penalties and limited payout options. The insurer denied the full benefit.
25. Illegal viatical settlement
The policy was sold to an investor without proper documentation. The insurer refused to pay the buyer’s claim.
26. STOLI arrangement was unlawful
The policy was part of a stranger-originated scheme, banned under state law. The insurer rescinded the policy after investigating the origination.
27. Loan-related policy already satisfied
A credit life policy was tied to a loan that had been paid off. The insurer said no balance remained to trigger coverage.
28. Group credit policy voided
The borrower left the lending institution’s program. As a result, the group policy no longer applied at time of death.
29. Creditor-placed policy overridden
The borrower had their own active policy. The creditor’s insurer argued that their policy was secondary and declined the claim.
30. Mortgage policy void after refinance
A homeowner refinanced but failed to update the mortgage life policy. Upon death, the policy no longer matched the debt and was denied.
31. Juvenile policy mismanaged
Ownership of a child’s life policy was never transferred. When the child became an adult and died, the policy had lapsed due to non-payment.
32. Senior policy waiting period not met
A senior purchased a final expense policy with a graded benefit clause. They died within the waiting period, and the claim was reduced.
33. Funeral policy denied for prepayment
The funeral was already covered through a prepaid plan. The insurer denied the funeral insurance payout for duplicative benefits.
34. Final expense documentation missing
The insurer required specific invoices. The family submitted a general funeral bill, and the claim was denied as incomplete.
35. Guaranteed issue denial due to eligibility
The applicant falsely claimed they were a resident of a qualifying state. When the insurer investigated, they rescinded the policy.
36. Simplified issue denial after failed screening
The insured said “no” to all health questions. Later records showed multiple chronic conditions, and the claim was denied.
37. Full underwriting omission
The applicant failed to mention prior heart surgery. When the policy was contested, the insurer rescinded it posthumously.
38. Retroactive claim with flawed records
A backdated policy was issued based on missing medical data. Upon death, the insurer investigated and denied the claim.
39. Term conversion paperwork not filed
The insured wanted to convert to a permanent policy but never completed the forms. The policy expired, and no benefit was paid.
40. Variable policy losses
The death benefit was tied to market performance. The investments lost significant value, leaving the payout well below expectations.
41. Universal life lapse
The policy’s cash value had been depleted by fees and loans. No premiums were paid, so the insurer denied the claim for lapse.
42. Whole life loan exceeded value
The insured borrowed heavily against the policy. Upon death, the loan balance exceeded the benefit.
43. No-exam policy disqualified
A no-exam policy was later contested when the insured died from a preexisting condition that would have disqualified them had it been disclosed.
44. “No questions asked” plan denial
Despite the name, the insurer denied the claim for failing to meet eligibility rules related to high-risk occupations.
45. Term policy inactive at death
A lapse went unnoticed for months. The insurer denied the claim, even though the policyholder believed coverage was still active.
46. Missed premium on guaranteed renewable policy
The premium increased and was not paid. Although the policy was “guaranteed renewable,” the missed payment voided coverage.
47. Non-guaranteed renewal not approved
The insurer chose not to renew the policy after the term ended. The death occurred after the renewal window closed.
48. Early cancellation of return-of-premium policy
The insured cancelled the policy before the full term. As a result, the return-of-premium benefit was voided and the claim was denied.
49. Survivorship policy not triggered
One spouse died, but the second was still alive. Because the benefit only pays after both pass away, the claim was denied.
50. Group survivorship eligibility issues
A company-funded survivorship policy didn’t cover the second insured, who had retired. Upon death, the insurer rejected the claim based on ineligibility.
Don’t Assume a Life Insurance Denial Is Final
Even when an insurer offers a detailed explanation, it’s possible the denial is incorrect or based on outdated information. At our firm, we’ve helped families recover benefits after wrongful denials involving misrepresentation, policy lapse, suicide exclusions, and more. If your claim has been denied for any reason especially one listed above contact us to learn how we may be able to help challenge it.