9 Scenarios and Types of Death Your Life Insurance Policy Might Not Cover

Instances where you’re found to have misrepresented yourself in your life insurance application, have a death that is excluded from coverage or allow your coverage to end before your death can all result in your life insurance payout being denied to your beneficiary or your policy being canceled. Life insurance policies are often taken out decades before a potential claim, making it critical to ensure you don’t waste the investment you’ve made in monthly premiums.

Keep reading to learn more about what isn’t covered by life insurance and how best to get the coverage you need.

What Isn’t Covered by Life Insurance?

Below, we list several reasons why your life insurance company may deny a life insurance claim filed by your beneficiary after you die, including letting your policy lapse, your death involving an illegal activity and suicide in certain scenarios.

1. Expired or Lapsed Policies

Term life insurance only covers you for a specific timespan, meaning you will not be covered if you die once the term ends unless you renew your policy for another term. Whole life insurance will last the extent of a typical lifetime but your insurer may still refuse payout if you don’t pay your premiums and allow your policy to lapse.

Some types of cash value life insurance function as investment or savings accounts and you can use the proceeds to pay for the premiums. However, if there are no funds in this account to pay toward your premium and you do not make the payment manually yourself, your policy can lapse and you will be without coverage if you die before getting up-to-date on your payments.

In addition, keep in mind that life insurance coverage gained through employment may end if you quit or lose your job.^[1] If you have employer-based life insurance and are leaving or are fired, ask if there is any way to move the policy to a new employer or convert it to an individual life insurance policy.

2. Fraud

If your insurance company discovers your application was fraudulent, your policy could be reduced or canceled. Your life insurance company often has a period of contestability that spans the first two years of the policy, in which they can attempt to discover misrepresentations you made when applying for coverage.^[2] For example, if your insurer discovers you had a preexisting condition, such as heart disease or diabetes, were a smoker or lied about your age, your policy could be canceled.^[3]

Keep in mind that you typically won’t lose or have reduced coverage if you develop a condition or pick up a habit like smoking after your policy has begun.^[4]

3. Suicide

Death by suicide is often included in life insurance policy clauses that prevent payouts if it is deemed the cause of death within a specific time frame, typically the first two years after buying the policy.^[3] If you commit suicide during that time frame, your beneficiary may be denied your life insurance payout.

4. Wartime Travel

Whether you’re a military member in an active war zone or are traveling to an area currently in conflict, your life insurance may deny a claim if you die due to wartime activities. If you must travel to an area with war for your job, which might be the case if you are a journalist in the field, it may be worth finding a high-risk policy to give you coverage.

5. Aviation Activities

Deaths due to some aviation activities, such as skydiving, or you’re a hobbyist pilot flying a plane or helicopter, may not be covered by your life insurance company. However, if you’re a commercial pilot or a flight attendant and you die in a crash during work, then you may be eligible for coverage. You will likely need to disclose this when applying for coverage so that your insurer can adjust your premiums accordingly.^[5]

6. Illegal Activities

Deaths due to involvement in a criminal act won’t be covered by life insurance and will result in your life insurance being denied. For example, if you’re killed while robbing a bank and holding hostages, your beneficiary likely will not be able to claim the death benefit.

7. International Travel

Some countries may be excluded from coverage if you die there. For example, if you were to travel to a country that was declared unsafe for travelers due to war, disease or some other life-threatening cause, your death benefit may be withheld from your beneficiary if you die there.^[6] These countries may vary between insurers and can change over time, so check your policy before traveling to another country.

8. No Beneficiary

If you lack a beneficiary because you never designated one or they died and you forgot to designate a new one, your insurance claim will instead go to your estate. This can cause your death benefit to get locked down in the often complicated and lengthy process that is probate court. Your entire death benefit can potentially go to paying down your debts with not a dime going to your intended recipient. Always ensure your policy has an up-to-date beneficiary.

9. Homicide by the Beneficiary

While homicide is typically covered by life insurance, your claim may be denied if the perpetrator is your beneficiary. This is due to the “slayer rule,” which prevents property or finances from being inherited from a person someone murdered or assisted in murdering. Fortunately, your payout may be able to go to a contingent beneficiary or an estate if available.

How To Get the Right Life Insurance Policy

You’ll typically want to consult with three to five different life insurance companies to get a range of options based on the payout you need and the premiums you’re prepared to pay. Each insurer will need information on your health, age, gender, personal information and other potential risks that could contribute to your life insurance rates.

This process may become repetitive, but you can expedite it using an insurance marketplace like SmartFinancial. After completing a brief survey, we can connect you to a licensed insurance agent to help you find the ideal life insurance policy that meets your and your beneficiaries’ needs. They can also answer questions you might have about term life insurance versus permanent life insurance. Click here to get a cost-free quote today.