What to Do if Your Life Insurance Claim Is Denied (2025 Appeal Guide)

What if you’ve invested your efforts and hard-earned money into obtaining a life insurance policy, making timely payments, and filing a death benefit claim only to be told that your life insurance company has rejected your claim? It might be an unwelcome surprise since life insurers deny a policy claim 1% of the time. 

That being said, certain conditions can lead to rejection. For example, if the policyholder fails to make their policy payments or supply adequate medical information before the application process. 

If your claim is denied, you can expect the life insurer to refund any life insurance premiums made and cancel your policy. You may also decide to appeal the decision by reaching out directly to the insurer. Still, this will only alter something if there is an oversight or miscommunication in processing your application. 

In this article, we dig deeper into such scenarios and guide you through understanding valid reasons for life insurance claim denial and the forms of recourse available.

Why do life insurance claims get denied?

When you buy life insurance, there’s an underlying assumption that the policy will provide a financial safety net in the event of your death. That’s why it can be so disheartening to hear that a claim has been denied. After all, life insurance aims to give you and your family some peace of mind.

Here are a few reasons why life insurance won’t pay out.

Suicide Exclusion

Most life insurance policies come with a suicide exclusion. A suicide exclusion means that in the first two years of coverage, insurers will not pay out for suicide deaths. This clause protects the insurer from fraudulent claims or individuals who buy life insurance right before they take their own lives. 

Exclusions in Policies

Another reason life insurance companies may deny claims is if the policyholder died while committing a crime or any other action excluded explicitly in their policy. 

For example, the benefit may be reduced or refused entirely if the policyholder engaged in extreme sports activities when they died. (For more information, read our “Life Insurance for Extreme Sports“).    

Misrepresentation on Application

Submitting false information on your application may lead to a complete denial or reduction of any associated benefits. Therefore, it’s essential to be honest when filling out your life insurance application so that your benefits are not nullified due to incorrect information provided. Find out what happens if you lie on your life insurance application.

Nonpayment of Premiums

Any unpaid premiums can also lead to claim denial. Life insurance policies require policyholders to make timely payments throughout the contestability period (usually the first two years of coverage). Failing to do so may result in a loss of coverage and a denial of the claim. (Read our “What happens if I don’t pay my life insurance premium?” for more information)

What to Do if Your Life Insurance Claim Is Denied

There are two things you can do if your claim is denied:

• Contact the insurer
• Appeal the rejection

Let’s look at each of these options in more detail.

Contact the Insurer

The first step in appealing a denied claim is to understand the denial. Carefully read over the insurer’s initial denial letter and determine if the reasons are clear or if they have provided sufficient evidence.

Subsequently, contact the insurance provider and request additional information concerning why they refused payment of the death benefit. Necessary documentation could include medical records, autopsy reports, or proof of premium payments, all evidence validating your claim.

Keeping track of the timeline is vital when appealing a claim from an employer’s group life insurance policy. These policies typically have limited appeal periods, usually no longer than 60 days.

Appeal the Rejection

If the claim is still denied after examining the paperwork, then you may need to file an appeal. You can do this by filing a formal appeal letter with the insurance company, which should outline your argument and any evidence you wish to present.

Your state insurance department can help guide you through the process and provide other forms of assistance.

Get an Attorney

No one wants to hire a lawyer, but it may be the best option for denied life insurance claims. After all your attempts with the insurer have been unsuccessful and you feel like you’ve reached a dead end, turn to an experienced attorney. 

An attorney can give you professional guidance on if there is a realistic chance of success if you opt for legal action. They can also assess other details like how complex the case might be or what kind of fees and costs you should expect. 

How to Prevent Having a Claim Denied

As we’ve discussed earlier, there are various reasons why life insurance companies deny claims. The good news is that you can take steps on how to file a life insurance claim to ensure that this will approve. 

Application Responses

One of the essential parts of the life insurance application process is providing detailed answers about health and health-related activities such as smoking, prescription or other medications, and dangerous hobbies. 

You must also provide accurate and up-to-date information to reduce the likelihood of a claim denial due to misrepresentation on your application.

Understanding Terms & Conditions

Read and understand the terms and conditions of your life insurance policy. That will help ensure that you meet all of the requirements for filing a claim and avoid unnecessary delays.

Application Review

Before submitting your application, read through everything carefully to ensure it is accurate and complete. If you are applying for employer-provided life insurance coverage, ask your benefits administrator or HR representative to review your application.

How to Protect Your Beneficiaries From a Claim Denial

Life insurance provides financial support to your family after you pass away. However, if your beneficiaries cannot file a successful claim, they may not receive the money they need. If you want to ensure your loved ones aren’t denied a claim, here are the best steps. 

• Be truthful in your application. Don’t try to hide any health issues or other pertinent information because that could increase the likelihood of claim denial once the policy is in force.
• Pay your bills automatically. Set up automatic payments for your life insurance premiums so you don’t have to worry about missing any payments or losing coverage. 
• Update your beneficiaries. Make sure to update your policy’s beneficiary information regularly so that your designated recipients will receive the proceeds in the event of a claim. Learn how to choose a life insurance beneficiary.
• Share your plans with beneficiaries. Tell your beneficiaries about your life insurance plan and how they can file a life insurance claim if necessary.

You can contact your insurance company for assistance if you need clarification on any of the above steps. They should be able to provide guidance and help you ensure that your beneficiaries won’t be denied a claim.

Case Studies: What to Do if Your Life Insurance Claim Is Denied

Case Study 1: Sarah’s Suicide Exclusion

Sarah’s spouse passed away unexpectedly, and she filed a claim with her life insurance company. However, her claim was denied due to the suicide exclusion in the policy. Sarah was devastated and unsure of what steps to take next.

She decided to contact the insurer to understand the reasons for denial and explore any possible options for appeal or recourse.

Case Study 2: John’s Misrepresentation Issue

John had a life insurance policy for several years before he passed away. His beneficiaries filed a claim, but it was denied due to misrepresentation on the application. The insurer discovered that John had provided incorrect information about his health at the time of applying for the policy.

Case Study 3: Emily’s Nonpayment Situation

Emily’s father had a life insurance policy, but the claim was denied because he had missed premium payments during the contestability period. Emily was unaware of the missed payments and felt that the denial was unfair.

She contacted the insurer to discuss the situation and requested documentation to support the denial. Emily also consulted with an attorney to understand her rights and explore potential avenues for appeal.

What to Do if Your Life Insurance Claim Is Denied: The Bottom Line

No one expects to have their life insurance claim denied, but unfortunately, it does happen. Therefore, always be honest and straightforward when applying, as that tactic has a notably higher success rate than attempting to skirt around the application process. 

If your claim is denied, don’t give up. You may still be able to successfully appeal your denied life insurance claim with the help of an experienced attorney. 

And remember to take preventative measures, such as providing accurate responses on your application or updating beneficiary information regularly.