When Is Life Insurance Denied? 
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 . In the first two years after the policy has been kept in force there is a contestability period for suicide , misrepresentation and fraud . Keep in mind that certain life insurance companys death claim due diligence processes may continue after the two year contestability period based on some forms of fraud and criminal activity surrendering the insureds death . If it feasible that a life insurance company to experience financial problems , fall into receivership of the state -LRB- a form of bankruptcy -RRB- and affect claims paying ability . 