Does Life Insurance Always Pay Out? 
Yes , life insurance in force at the death of the life insured pays out the death benefit proceeds once proof of death has been submitted . The life insurer can not deny a claim unless due to either suicide in the first two policy years or a material misrepresentation in the first two years of the policy . 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 . Life insurance is something you need to qualify for in advance - the insured must be insurable , the owner must have an insurable interest , etc. . 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 cases of fraud . 