Top 10 Reasons Life Insurance Claims Are Denied
Nonpayment of Premiums
If the policyholder fails to pay premiums and the policy lapses, the insurer will likely deny the claim. Even a brief lapse—especially close to the date of death—can result in denial, unless legal exceptions or grace periods apply.Material Misrepresentation on the Application
If the policyholder provides false or incomplete information about health history, occupation, or lifestyle, the insurer may argue that the misrepresentation invalidates the policy—especially if discovered during the contestability period.Death During the Contestability Period
Most policies include a two-year contestability period. If the insured dies within that time, the insurer may investigate the application for errors and rescind the policy based on any material misstatement.Excluded Cause of Death
Policies commonly exclude specific causes of death, such as suicide (typically within the first two years), acts of war, or death during commission of a felony. If the death falls under one of these exclusions, the claim may be denied.Risky or Undisclosed Activities
If the insured died while engaging in undisclosed high-risk activities—like skydiving, scuba diving, or auto racing—the claim may be denied due to increased, unassumed risk.Death During Criminal Activity
Life insurance policies often exclude coverage for deaths occurring during illegal acts. For example, if the insured died during a robbery or while evading law enforcement, the claim may be denied under a criminal activity exclusion.Undisclosed Pre-Existing Conditions
If the insured failed to disclose serious medical conditions such as diabetes, cancer, or heart disease, and those conditions contributed to death, the insurer may deny the claim for misrepresentation.Suicide Clause
Most policies exclude suicide within the first two years. If the insured dies by suicide during that period, the insurer typically refunds premiums but denies the death benefit.Death from Substance Abuse
Some policies exclude deaths related to drug or alcohol use, particularly if abuse was undisclosed during underwriting or played a role in the cause of death.Military Service Exclusions
Certain policies exclude death that occurs while the insured is on active military duty or serving in a war zone. This exclusion may apply to both combat and non-combat-related deaths.
Main Reasons ERISA Life Insurance Claims Are Denied
Claims under ERISA-governed life insurance policies, typically offered through employer benefit plans, are subject to additional administrative requirements and legal rules. Common denial reasons under ERISA include:
Application Errors or Omissions – Inaccurate or incomplete information can lead to denial during contestability reviews, especially if the policy was recently issued.
Lapse in Coverage – If premiums were not paid due to employer error, missed payroll deductions, or administrative mistakes, the insurer may argue the policy was not active.
Ineligibility for Coverage – Employees may be denied coverage if they failed to meet eligibility criteria or missed deadlines for enrollment or conversion after termination.
Excluded Death Circumstances – As with private policies, deaths from suicide, drugs, or criminal acts may trigger exclusions under ERISA policies.
Disputes Over Beneficiary Designation – Conflicting claims from multiple individuals (e.g., ex-spouse vs. current spouse) may result in benefit denial or an interpleader lawsuit.
Failure to Convert Coverage After Leaving a Job – If an employee fails to convert group coverage to an individual policy after termination, insurers may deny the claim.
Administrative Denial Without Full Medical Review – ERISA insurers often deny claims based on paperwork alone, without proper investigation. These denials can be appealed under ERISA's strict deadlines.
Unlike individual life insurance, ERISA claims have a formal appeal process and strict deadlines. Claimants have 60 days (or as little as 30, depending on the plan) to appeal, and must exhaust administrative remedies before filing a lawsuit.
If your claim has been denied—whether it's a private or ERISA life insurance policy—our law firm can help. We understand how insurers operate and know how to build successful appeals and lawsuits to recover wrongfully withheld death benefits.
FAQ: Life Insurance and ERISA Claim Denials
What is the contestability period in a life insurance policy?
It’s typically the first two years of the policy. During this time, insurers can deny claims for any material misrepresentation, even if unrelated to the cause of death.
Can missing one premium payment cause a policy to lapse?
Yes. If the payment is missed and the grace period expires, the policy may lapse. However, some lapses may be contestable if the insurer failed to provide notice.
What qualifies as a material misrepresentation?
A material misrepresentation is any false or omitted information that would have changed the insurer’s decision to issue or price the policy.
Can a life insurance claim be denied if the insured died while skydiving?
Yes, if the activity was excluded or not disclosed during the application process. Risky activities often require separate underwriting.
What is an ERISA life insurance plan?
It’s a life insurance policy provided through an employer and governed by the Employee Retirement Income Security Act of 1974 (ERISA), which imposes specific claims and appeal procedures.
Can ERISA insurers deny claims without investigating?
They often try. Many ERISA denials are based on paperwork, but can be overturned on appeal with additional documentation or legal challenge.
What happens if multiple people claim the life insurance benefits?
The insurer may file an interpleader lawsuit and deposit the funds with the court. A judge will determine who is legally entitled to the proceeds.
Can I sue if my ERISA claim is denied?
Yes, but only after you file and exhaust a formal administrative appeal. Deadlines are strict, and missing them can forfeit your right to sue.
What if the insurer claims the insured wasn’t eligible under a group plan?
Eligibility disputes are common in ERISA claims. If the employee was misclassified or not properly notified, the denial may be challengeable.
Do suicide exclusions apply forever?
No. Most policies include a suicide exclusion for the first two years only. After that, suicide is typically covered like any other cause of death.
Are drug overdose deaths excluded from coverage?
They can be, especially if drug use was not disclosed. However, exclusions must be clearly stated, and not all policies contain them.
Can a life insurance policy be denied if the insured had a criminal record?
Only if the death occurred during criminal activity, or if the criminal history was relevant and undisclosed at the time of application.
What should I do if my claim is denied?
Request a written explanation, gather all documentation, and consult with a life insurance attorney immediately—especially if you're within the contestability or appeal window.
How long do I have to appeal a denied ERISA claim?
Most plans give you 60 days. Some give as little as 30. Failing to appeal on time may waive your right to any further legal action.
Can your law firm help with denied group life insurance claims?
Yes. We handle both individual and ERISA-governed group policy denials nationwide and fight to recover the full benefits owed.