$425,000 Life Insurance Claim Resolved After Denial: What You Need to Know About Policy Exclusions
Our life insurance attorneys recently secured a $425,000 payout for a beneficiary whose claim was initially denied due to alleged policy exclusions. The policy included both standard life insurance and accidental death and dismemberment (AD&D) coverage. After extensive investigation and legal advocacy, we proved that the insurer had wrongly applied the exclusions. This victory is a reminder that just because a claim is denied doesn’t mean it’s final—especially when exclusions are misapplied or misunderstood.
Understanding how policy exclusions work is critical for both policyholders and beneficiaries. Exclusions are specific conditions under which the life insurance company refuses to pay out benefits. Unfortunately, many claims are denied based on exclusions that either don’t apply or are interpreted too broadly. Below we break down common exclusions under both regular life insurance and AD&D policies and explain how they can affect claims.
Common Exclusions in Regular Life Insurance Policies
While every life insurance policy has its own language, there are several exclusions that appear frequently across standard term and whole life insurance contracts:
Suicide Clause: Most life insurance policies include a suicide exclusion for the first one to two years after issuance. If the insured dies by suicide within this period, the insurer may return only the premiums paid, rather than the full death benefit.
Material Misrepresentation: If the insured omitted or falsified information during the application process—such as hiding a pre-existing medical condition—the insurer may rescind the policy and deny the claim during the contestability period, typically the first two years.
High-Risk Activities: Many policies exclude coverage if death results from activities considered inherently dangerous. This can include skydiving, scuba diving, mountain climbing, or private aviation, unless the policy specifically allows for those risks.
Illegal Acts: If the insured died while committing a felony or engaging in illegal behavior, the insurer may invoke an exclusion. However, these exclusions are often disputed depending on the circumstances.
Act of War or Military Service: Some policies exclude coverage for deaths that occur during active duty or due to acts of war, although this language is less common in civilian policies today.
What AD&D Policies Do and Don’t Cover
Accidental Death and Dismemberment (AD&D) insurance is different from traditional life insurance because it only pays out if the insured dies or suffers a serious injury due to a qualifying accident. It does not cover illness or natural causes of death. Because of its narrow focus, AD&D policies often include a wider array of exclusions:
Non-Accidental Causes: If the cause of death or injury is found to be medical in nature (e.g., stroke, aneurysm, heart attack), the claim will typically be denied. The death must be directly caused by a sudden and unforeseen external event.
Self-Inflicted Injuries: Just like traditional policies, AD&D coverage typically excludes any injuries or death that are the result of intentional self-harm.
Alcohol and Drug Involvement: If the insured was under the influence of alcohol or drugs at the time of the incident, and this impairment contributed to the cause of death, insurers may deny coverage under AD&D.
Illness or Infection: Injuries resulting from an illness or those that lead to infection may not qualify, depending on how the policy defines "accidental injury."
Acts of War or Terrorism: Similar to standard policies, many AD&D plans exclude claims resulting from military conflict or terrorist events, unless the insured had a rider that covers such risks.
Why Claims Get Denied Over Exclusions
Life insurance companies may deny claims even when the grounds for doing so are weak. This is especially true when exclusions are vaguely worded or open to interpretation. Insurers often rely on their own internal investigators or claim adjusters to interpret medical records, accident reports, and death certificates in a way that supports denial. If you’re a beneficiary facing a denied claim, don’t assume the insurer’s word is final.
Our team has successfully overturned numerous denials based on disputed exclusion clauses. In many cases, we find that the denial was based on a misreading of the policy language, a questionable toxicology report, or insufficient proof that the exclusion actually applies.
What Beneficiaries Can Do After a Denied Life Insurance Claim
If your life insurance claim has been denied due to exclusions, you still have legal options:
Request a full explanation and the documentation the insurer used to justify the denial.
Review the policy with a life insurance attorney to determine if the exclusion was applied correctly.
File an appeal with the insurer, supported by medical records, expert analysis, or witness statements.
Pursue litigation if the insurer refuses to reverse the denial and the evidence is in your favor.
Insurance companies count on people giving up after a denial. But with the right legal support, many claimants can recover the full value of the policy. In the $425,000 case we resolved, the insurer had cited an exclusion related to alcohol use. After presenting expert testimony and contradictory medical findings, we proved the death qualified for full benefits under both the regular and AD&D coverage.
Life Insurance Exclusions FAQs
What is the suicide clause in a life insurance policy? Most life insurance policies contain a suicide clause that excludes coverage if the insured dies by suicide within one or two years of the policy's start date. After that period, the policy typically pays the full benefit.
Do all life insurance policies exclude high-risk activities? Not all, but many do. If the insured frequently engages in dangerous hobbies or sports, it’s important to check if the policy includes a rider to cover such risks.
Can a life insurance claim be denied for alcohol use? Yes. If the death is linked to intoxication and the policy contains a clause excluding deaths caused by alcohol or drug impairment, the insurer may deny the claim. However, these denials are often challengeable.
Is a death from a heart attack covered by an AD&D policy? No. Accidental Death & Dismemberment policies only cover accidental injuries, not natural causes such as heart attacks, strokes, or illnesses.
Can a life insurance company deny a claim based on pre-existing conditions? During the contestability period (usually the first two years), an insurer may deny a claim if the insured failed to disclose a pre-existing condition. After that, most policies remain in force unless fraud is proven.
What if my claim was denied due to illegal activity? If the insured was engaged in criminal conduct at the time of death, the insurer might deny the claim. However, there must be clear proof linking the activity to the cause of death, and the exclusion must be explicitly stated in the policy.
Can life insurance be denied if the insured was in the military? Some older or specialized policies exclude deaths that occur during military service or acts of war. Many modern civilian policies no longer include this exclusion, but it depends on the language of the contract.
How long do I have to appeal a denied life insurance claim? Each insurer sets its own timeline, but generally you must appeal within 30 to 90 days. Consult with an attorney as soon as possible to avoid missing deadlines.
Is it worth hiring a lawyer for a denied life insurance claim? Absolutely. Many claim denials are overturned when experienced attorneys challenge the insurer’s interpretation of the policy or gather additional evidence. A lawyer can ensure your rights are protected and help you recover the benefits you deserve.
What if the policy includes both life insurance and AD&D coverage? If the policy contains both, it may pay out double benefits in the case of a qualifying accidental death. However, insurers often deny the AD&D portion more aggressively, making legal review essential.