Denied life insurance claims under employer-provided plans are rarely about a single mistake. Under ERISA, denials usually stem from administrative breakdowns, enrollment errors, or technical plan interpretations that beneficiaries never see coming. Unlike individual policies, ERISA plans are governed by federal rules that heavily favor insurers and plan administrators, making denials both more common and harder to reverse without understanding how the system actually works.
Below are twenty of the most frequent and narrowly identifiable reasons ERISA life insurance claims are denied, based on patterns we see repeatedly in real cases.
1. Payroll deductions stopped without clear notice
One of the most common ERISA denials occurs when payroll deductions end during unpaid leave, disability, or job status changes. The employee assumes coverage continues, but premiums are no longer transmitted to the insurer. The denial is then framed as nonpayment, even though the employee was never warned the deductions had stopped.
2. Coverage terminated during unpaid medical or family leave
Group life insurance often requires “active employment” status. When an employee goes on unpaid medical leave, FMLA leave, or reduced hours, coverage may terminate automatically under the plan terms. Employers frequently fail to explain this distinction, creating an invisible coverage gap.
3. Enrollment elections never processed by HR
Employees can complete elections correctly and still end up uninsured if HR fails to transmit enrollment data to the insurer. Under ERISA, insurers often deny claims by stating no coverage ever existed, shifting blame to the employer while leaving beneficiaries caught in the middle.
4. Evidence of insurability requirements overlooked
Many group plans require additional evidence when coverage exceeds a guaranteed amount. Employees elect higher coverage, premiums are deducted, but the required health form is never completed or approved. After death, the insurer denies the excess benefit, claiming it was never in force.
5. Misstatements made during group enrollment
ERISA insurers scrutinize enrollment forms after death, especially within the first two years. Even omissions that had no bearing on the cause of death can be labeled “material,” despite the plan having issued coverage and accepted premiums.
6. Alleged pre-existing condition omissions
Although many group plans no longer exclude pre-existing conditions outright, insurers still attempt to deny claims by arguing that an undisclosed condition would have affected eligibility or coverage limits under the plan’s underwriting rules.
7. Death occurred between job transition dates
Employees changing jobs often assume coverage overlaps. In reality, group coverage usually ends on the last day of employment, not the last paycheck. If death occurs during that gap, insurers deny claims unless conversion rights were properly triggered and disclosed.
8. Failure to exercise conversion rights
ERISA plans typically allow conversion to an individual policy after termination. When employers fail to notify employees of this right, coverage quietly expires. Insurers then deny claims, even if death occurs within days of termination.
9. Suicide exclusions applied aggressively
Most ERISA plans exclude suicide during the first two years. Insurers often stretch the definition of suicide to include ambiguous deaths, overdoses, or asphyxiation cases, even where intent is unclear or unsupported by evidence.
10. Death linked to excluded activities
Group policies often contain exclusions for aviation, underwater activities, or hazardous recreation. Employees are rarely informed of these exclusions. After death, insurers rely on narrow policy language to deny claims based on activity alone.
11. Alcohol or drug involvement cited as causal
Even trace amounts in toxicology reports can trigger denials. Insurers often claim impairment contributed to death, even when accident reports, witness statements, or medical findings say otherwise.
12. Criminal or illegal activity exclusions
Insurers sometimes deny claims based on alleged criminal conduct, even where no charges were filed or the activity was a minor infraction. Under ERISA, the burden often shifts to beneficiaries to disprove the insurer’s interpretation.
13. Felony exclusion misapplied to innocent beneficiaries
Some plans exclude deaths occurring during felonies. Insurers may attempt to deny benefits entirely, even when minor children or dependent beneficiaries had no involvement and independent rights under the plan.
14. Cause of death listed as “undetermined”
When death certificates are unclear, insurers delay or deny claims pending further investigation. These delays often turn into constructive denials unless beneficiaries actively push back with supporting documentation.
15. Missed internal claim deadlines
ERISA plans impose strict timelines for filing claims and appeals. Beneficiaries who rely on employer guidance often miss these deadlines, only to be told later that their rights are forfeited.
16. Beneficiary designation missing or disputed
If no valid beneficiary form is on file, or multiple versions exist, insurers often file interpleader actions rather than decide. This delays payment and shifts the burden onto competing claimants.
17. Beneficiary forms lost or misfiled
It is common for employers to misplace beneficiary forms or fail to upload them to the insurer’s system. Under ERISA, insurers frequently rely only on what is in their file, not what was actually submitted.
18. Coverage terminated during corporate restructuring
Mergers, acquisitions, and outsourcing often lead to benefit system changes. Employees may believe coverage continues uninterrupted, but internal errors cause silent terminations that only surface after death.
19. Unauthorized coverage elections
Insurers sometimes deny claims by arguing the employee was never eligible for the coverage elected, such as part-time status, probationary periods, or classification errors, even when premiums were deducted.
20. Improper policy assignment or trust designation
Assignments to trusts or changes in ownership must strictly comply with plan rules. When paperwork is incomplete or processed incorrectly, insurers may deny claims outright instead of clarifying intent.
Why ERISA Denials Are So Hard to Reverse
ERISA claims are decided almost entirely on paperwork. Courts usually review only the administrative record, meaning anything not submitted during the appeal may never be considered later. This is why many valid claims fail, not because coverage did not exist, but because the denial was never challenged correctly.
Understanding the specific reason for denial is more important than the denial itself. Each category above involves different evidence, different legal standards, and different strategies. Treating all ERISA denials the same is one of the most costly mistakes beneficiaries make.