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Why are some claims not covered by term life insurance?

There are a few ways a term life insurance claim could be denied, but rest easy. In most years, only a small fraction of life insurance claims are contested. So, this insurance may still be a great choice for you.
November 18, 2020
3 min read
Claims not covered by term life insurance

Because term life insurance is designed to be affordable and delivers a high amount of coverage, it is one of the most popular types of life insurance. However, be sure to review your policy so that you are extra confident you understand it! There are some instances in which term life insurance might not pay out to your chosen beneficiaries if you pass away. Read on to learn more.


Your term expired

One of the reasons term life insurance may be so affordable is that it only covers you for a set term and then expires on a specified date. It’s important to be absolutely certain when your term insurance expires so that you can renew it in a timely fashion. Otherwise, it may be easy to let your policy expire and get caught without coverage!


Your monthly premium is late

If you let your monthly premium payments lapse and aren’t caught up by the time of your demise, your loved ones may pay the price. Some insurance companies allow a grace period for late payments, but others may cut off coverage as soon as a payment is late. So, it’s advisable to know the details of your policy.


You fudged the facts

If you omit key information about your health or lifestyle habits on your life insurance application—for instance, that you are a smoker or even that you used to smoke years ago—the life insurance company could deny your loved ones a death payout on the grounds of fraud. Likewise, if you do not disclose on your insurance application that you have a risky hobby like bungee jumping, and then you pass away on your third leap off the Golden Gate Bridge—your insurer could deny a claim because you concealed your dangerous pastime. Don’t be afraid to tell the truth about health conditions like HIV or adventure sports like mountain climbing. There are a number of insurance companies that will allow you to purchase.


You passed away on the wrong side of the law

If you pass away while breaking the law, for instance while committing a burglary, your life insurance company could deny your loved ones benefits. Believe it or not, this holds true even for misdemeanors like trespassing on private property or driving over the speed limit!


You are covered by “the slayer rule”

The good news is that your life insurance company can look out for you in the event that others might mean you harm. A typical term life policy pays coverage to your chosen beneficiaries if you are murdered, but not if there is evidence that one of your own beneficiaries might have done you in to get the money!


You take your own life

Most term life policies pay benefits to your loved ones if you commit suicide, but only after a “contestability” period that typically lasts two years from the start of your policy. This is to ensure that people do not buy life insurance solely for the purpose of committing suicide to help their families get the policy money.


You die in an act of war

If you travel to a war-torn area for business or personal reasons and are killed in crossfire, many term life insurance policies could refuse paying benefits to your loved ones. This is because you knowingly entered a deadly area, but don’t worry about American soldiers ordered into war—they are covered by the United States military.


You pass on overseas

It may seem strange, but some U.S. life insurance policies may deny benefits to your loved ones if you are living in a foreign country at the time of your death. Be sure to explain on your insurance application if you have any future plans for living outside the U.S. and check your policy for rules on death in another country. 



You may be overwhelmed by the number of ways in which your term life insurance claim could be denied, but rest easy. In most years, only a small fraction of life insurance claims are contested, and a portion of these claims are ultimately paid anyway. Furthermore, life insurance benefits paid to your loved ones usually are not taxed. So, this insurance may be a great option for you.

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