Co-Founder, Coastal Financial Partners Group, California
Life insurance claims can be denied but it is very rare for a life insurance company to not pay the death benefit proceeds if the life insured has died and proof of death has been submitted.
If death was by suicide or a material misrepresentation in the first two policy years of the policy, the claim will be investigated. If a life insurance company does not pay a death claim in these situations at the conclusion of their investigation, they would return premiums paid with interest.
For a life insurance claim to be denied, after an investigation, the insurance company would have to contest it within the first two policy years on the basis of a material misrepresentation made during the application process or the insured would have to have committed suicide within the first two policy years. An insurance company may not normally contest a claim after the first two years of a policy except in very limited circumstances of fraud.
If you are speaking of applying for life insurance, yes, life insurance can be denied for poor health or other risk factors. Each policy has it's own criteria, including ages and states for which that product is offered. It is important to cover all the questions on the application with your agent, or have them reviewed by your agent, to be sure that you are applying for a policy for which you qualify. Many denied or declined policies are unnecessary if the proper steps had been taken beforehand.
If you are asking whether a life insurance benefit can be denied, see Jerry's answer.
There are a variety of reasons why life insurance would be denied to a potential insured applying for coverage: Medical issues, no financial justification, the recreational activities are too dangerous, there is no insurable interest, the travel destination during the next two years is too dangerous, the driving record is too egregious, drug abuse, vocation hazard , etc. There are reasons that a death claim would be denied like fraud or suicide in the first two years.
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If death was by suicide or a material misrepresentation in the first two policy years of the policy, the claim will be investigated. If a life insurance company does not pay a death claim in these situations at the conclusion of their investigation, they would return premiums paid with interest.
For a life insurance claim to be denied, after an investigation, the insurance company would have to contest it within the first two policy years on the basis of a material misrepresentation made during the application process or the insured would have to have committed suicide within the first two policy years. An insurance company may not normally contest a claim after the first two years of a policy except in very limited circumstances of fraud.
If you are asking whether a life insurance benefit can be denied, see Jerry's answer.