Life Insurance Pay Out for Anything That Could Happen?

Life insurance is an integral part of securing a family’s long-term financial health. But in order for you to use it effectively and ensure adequate coverage, you need to know what it does and does not cover.

All life insurance policies, like health insurance plans, are effectively contracts. They have their specific terms. Failure to meet these terms will result in the insurance company refusing to pay out. They do not pay out in any and all situations and it always pays to read the fine print.

These are several circumstances that could result in your life insurance money not being paid out to your family in the event of your death.

File a Claim Life Insurance Pay Out for Anything That Could Happen?

Your Family Doesn’t File a Claim

The first one sounds obvious but is surprisingly common. If your family does not file a life insurance claim, the money will not make its way to them. It is not the insurer’s responsibility to track down and pay your family in the event of your death. They must approach the insurance company with a claim. Therefore, it is imperative they know the details of your policy and the insurance provider so that they can file a claim after your death.

To file a claim, the beneficiary should approach the insurance company shortly after the policyholder’s death with the certified death certificate.

Suicide File a Claim Life Insurance Pay Out for Anything That Could Happen?


Most life insurance policies will not pay out in the event of a suicide. Unless you have a specific suicide clause in the policy, which would allow your beneficiary to receive the premiums back after your death but no death benefit, your insurer will reject any claim on the policy.

Suicide clauses usually include a set time frame in which the insurance company can contest or investigate a suspicious claim. For example, if you take out a life insurance policy, there may be a time frame of two years in which the insurer can contest a suicide. This clause prevents people from taking out a life insurance policy, only to commit suicide shortly afterwards for the payout.

Murder by the Beneficiary

It is grizzly but these things do happen. If the benefactor murders the policyholder, or played any intentional role in the policyholder’s death, the life insurance policy provider has the right to deny the claim.

Non-Disclosed Smoking Habits Suicide File a Claim Life Insurance Pay Out for Anything That Could Happen?

Non-Disclosed Smoking Habits

When a policy provider puts together your life insurance policy, they ask about your medical history, including current and past smoking habits. If you are not honest about this information. Even if you die from a non-smoking related illness or accident, if they found out you lied on your application, the policy prover can refuse to pay out.

The Cause of Death Was Excluded from the Policy

Some policies state that if the death of the policyholder comes as a result of certain dangerous activities, they will not pay out. These activities can include flying a pilot plane, climbing mountains etc.

Like any contract, it is imperative you read the fine print of any life insurance policy and understand exactly what circumstances are covered under your policy and what are excluded.

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