Lying on your application is one of the chief reasons claims are denied. If you misrepresent yourself and your situation – such as not disclosing a serious health problem – and the insurer finds out, your claim will be denied. This is true even if your cause of death had nothing to do with the illness you tried to hide.
Insurance companies will likely deny a claim if the person fibbed during the “contestability period.” This occurs during the first couple of years after you purchase the policy. An insurer may also deny a claim if the person died by suicide within the contestability period.
Failing to pay your premiums also can lead to a claim denial. It’s possible your beneficiaries won’t even be aware that you missed payments. But if you fail to pay, your loved ones could be in for a rude shock after you die.
A claim also might be denied if:
The deceased’s primary beneficiary died and never named a secondary
The deceased is divorced and didn’t rename the current spouse as a beneficiary
The deceased failed to disclose that the person engaged in high-risk hobbies and activities