Why Life Insurance Claims Get Denied (and How to Avoid It)
Whatever brought you here, I hope we can make a difference.
Life insurance is meant to provide peace of mind and financial protection for families during an already painful time. But too often, valid claims are denied—leaving beneficiaries confused, overwhelmed, and without the support they expected.
At Dorian Law, we’ve helped many people challenge these denials and recover the benefits they were rightfully promised. Below, we explain the most common reasons life insurance claims are denied—and how to avoid these issues before they happen.
Application Errors and Misstatements
Material misrepresentation
One of the most common denial reasons is inaccurate or incomplete information on the original application. Even small omissions—like forgetting a past medical condition or failing to disclose a high-risk hobby—can result in the policy being voided, especially if the death occurs within the contestability period (typically two years).
How to avoid it:
Always answer questions on the application fully and honestly. If in doubt, disclose it. If the policy is updated or a rider is added, the contestability period may restart.
Policy Exclusions Hidden in the Fine Print
Policies often contain exclusions for specific causes of death, especially in the early years of coverage. These may include suicide, drug overdose, illegal activity, or high-risk hobbies like skydiving—unless disclosed and covered.
How to avoid it:
Review your policy for exclusions carefully. Ask your insurer for written clarification if you’re unsure whether something is covered.
Lapsed Policies Due to Missed Payments
If a policyholder misses premium payments, the coverage may lapse—leaving no benefits available at the time of death. Most policies offer a 30–90 day grace period, but many families only learn the policy lapsed after the claim is denied.
How to avoid it:
Use auto-pay when possible and monitor payment status. Ensure your beneficiaries know the policy is active and where to find it.
Missing or Incomplete Claim Documentation
Even with a valid policy, claims can be denied due to missing or incomplete paperwork. Required documents usually include the death certificate, the original policy, proof of identity, and insurer-specific forms.
How to avoid it:
Keep policy documents organized and accessible. Review all forms before submitting to avoid errors that could delay or jeopardize the claim.
Foreign Deaths and International Red Tape
When someone dies abroad, insurance companies may require translated documents, consular reports, and foreign death certificates. These requirements can lead to long delays—or outright denials—if documentation doesn’t meet U.S. standards.
How to avoid it:
If the insured spends time overseas, confirm the policy covers international deaths. Ask what documentation would be needed and share that information with beneficiaries.
Beneficiary Disputes and Legal Challenges
Claims can stall when multiple parties claim to be the rightful beneficiary, or when a recent change raises concerns about undue influence or capacity. In these cases, insurers often file an interpleader lawsuit, asking the court to decide.
In California, divorce revokes a former spouse as a beneficiary unless re-designated after the divorce.
How to avoid it:
Keep beneficiary forms updated, especially after major life changes. Don’t rely on a will to override an insurance policy—it usually can’t.
Fraud Accusations by the Insurer
Sometimes insurers allege fraud if they suspect the policy was purchased under false pretenses—like buying a large policy shortly before a foreseeable death. Even without clear proof, they may use this as justification to deny a claim.
How to avoid it:
Maintain a clear paper trail. If the insurer raises fraud allegations, seek legal guidance before responding.
Final Thoughts
A denied life insurance claim doesn’t have to be the end of the story. Many denials are based on technicalities, unclear policy language, or strategies meant to avoid payment. With the right legal support, these denials can often be reversed.
At Dorian Law, we focus exclusively on fighting insurance denials. If your claim has been denied—or you’re concerned about one—contact us for a free consultation. We’re here to help you fight back and get what your loved one intended for you to receive.
***Please note that this blog provides Useful Tips, Emerging Trends, and Thoughtful Insights regarding LTD, Life, and AD&D Insurance, including summaries of reported legal decision and does not constitute legal advice. Since posting, this blog has not been updated to reflect any subsequent changes in the law. Usually the cases discussed in Case Review Corner were handled by other law firms, but if you have questions about how the developing law impacts your ERISA benefit or bad faith insurance claim, Dorian Law may be able to advise you, so please contact us.***