When Does A Life Insurance Not Pay Out? 
It is rare for a life insurance policy to not pay out . The main things that could cause life insurance to not pay out are : 1 -RRB- The cause of death is suicide during the first two years or the policy . As I sadly found out from one of the policies I sold , this even applies to suicide committed by a child included on a child rider . 2 -RRB- Death was cause by something that was exempted -LRB- e.g. if the policy had an exclusion for death caused while piloting a plane , or from acts of war -RRB- . 3 -RRB- Withholding or misrepresentation about risk on the original application -LRB- e.g. if someone had just been diagnosed with cancer and answered `` no '' to the cancer question on the application -RRB- . If death occurs during the first two years of the policy , the insurance company will investigate to see that the application was filled out correctly , review the phone interview if there was one , etc. . Minor errors or omissions will be corrected by adjusting the premium . If the withheld or incorrect information would have caused the person to be uninsurable , the life insurance will not pay out . 