Life Insurance Company Says the Death Isn't Covered? Understanding Policy Exclusions

A Policy Exclusion Can Change Whether Benefits Are Paid

Life insurance is designed to provide financial protection after a policyholder dies. However, policies can contain exclusions that limit when the insurance company must pay benefits.

When an insurer believes an exclusion applies, it may deny the beneficiary's claim.

That can be particularly confusing when the policy was active, premiums were paid, and the beneficiary expected the death benefit to be available.

An exclusion does not necessarily give an insurer unlimited authority to deny a claim. The company generally must be able to point to policy language that applies to the circumstances of the death.

If the meaning of that language is disputed, the beneficiary may have grounds to challenge the decision.

Accidental Death Claims Can Depend on How the Policy Defines an Accident

Accidental death coverage can create disputes over exactly what counts as an accident.

Some life insurance policies include additional accidental death benefits, while others may contain specific limitations relating to certain types of accidental deaths.

An insurer might argue, for example, that a death does not qualify as accidental because an underlying medical condition contributed to it or because the events leading to the death fall within an exclusion.

The beneficiary may disagree.

These cases often require a close review of the policy language, medical records, death certificate, accident reports, and other evidence showing what caused the death.

The important point is that an insurer cannot simply label a death "not accidental" without considering how the policy actually defines the term.

Suicide Exclusions Can Affect Life Insurance Claims

Life insurance policies may contain suicide exclusions that limit coverage when an insured dies by suicide under certain circumstances.

Whether an exclusion applies can depend on the specific policy language, when the policy became effective, applicable state law, and the circumstances surrounding the death.

Disputes may also arise over whether the death was properly classified as a suicide. Insurers may review medical records, death certificates, law enforcement reports, toxicology results, witness statements, and other evidence before making a coverage decision.

A suicide-related denial should still be evaluated against the actual terms of the policy. Beneficiaries should not assume that a death classified as suicide automatically means no benefits are available. 

Alleged Illegal Activity Can Lead to Coverage Disputes

Some policies may contain language limiting coverage when a death occurs during certain unlawful conduct.

That does not mean every connection to illegal activity automatically eliminates life insurance benefits.

Disputes can arise over questions such as:

• Whether the policy actually contains an applicable exclusion
• Whether the insured was participating in the alleged activity
• Whether the activity caused or contributed to the death
• Whether the insurer is interpreting the exclusion too broadly

For example, the fact that an insured allegedly violated a law shortly before an accident does not necessarily answer whether a particular policy exclusion applies. The specific wording of the policy matters.

Hazardous Activities May Be Addressed Differently From One Policy to Another

Life insurance companies sometimes consider certain activities more dangerous than everyday activities.

Depending on the policy, exclusions or limitations may involve activities such as aviation, racing, extreme sports, or other high-risk conduct.

But there is no single rule that applies to every life insurance policy.

One policy may specifically exclude a particular activity. Another may cover it. A third may require additional coverage or charge a higher premium because of the increased risk.

That is why a beneficiary should review the actual contract rather than assume that a hazardous activity automatically prevents payment.

Questions can also arise about whether the activity that caused the death actually fits the policy's definition of an excluded activity.

Policy Interpretation Can Become the Center of the Dispute

Many exclusion cases ultimately come down to language.

The insurance company reads the policy one way. The beneficiary reads it another.

For example, a disagreement may involve whether a particular term is clearly defined, whether an exclusion applies to the facts, or whether the insurer is stretching the language beyond what the policy reasonably says.

Insurance policies are contracts, and courts may be asked to interpret disputed provisions when the parties cannot agree. That makes the wording of the policy extremely important.

Beneficiaries should consider requesting the complete policy, not just the denial letter or a summary of coverage. The full contract may contain definitions, limitations, exceptions, endorsements, or other provisions that affect the insurer's decision.

Insurers Can Be Held Accountable for Improper Denials

Insurance companies are allowed to investigate claims and apply valid policy exclusions.

They are not, however, free to invent exclusions or ignore policy language simply because denying a claim saves money.

If an insurer denies a life insurance claim, the beneficiary may want to examine:

• The reason given for the denial
• The exact policy provision the insurer relied on
• The evidence used during the investigation
• Whether important evidence was overlooked
• Whether the insurer's interpretation matches the policy language
• Whether applicable law affects how the provision should be interpreted

Depending on the circumstances, a beneficiary may be able to appeal the decision, negotiate with the insurer, or pursue the dispute in court.

Morgan & Morgan May Be Able to Help

Receiving a life insurance denial can be frustrating, especially when the insurance company says the circumstances of a loved one's death fall outside the policy.

You do not necessarily have to accept the insurer's interpretation without further review.

Morgan & Morgan can examine the policy, denial letter, claim file, medical records, accident reports, and other available evidence to determine whether the insurer properly applied the exclusion.

If the company wrongly denied benefits, our attorneys may be able to challenge that decision and pursue the compensation you are entitled to receive.

Contact Morgan & Morgan today for a free case evaluation. The Fee Is Free™: you don't pay unless we win.

Frequently Asked Questions 

What exclusions are common in life insurance policies?

Exclusions vary from policy to policy.

Depending on the coverage, they may address suicide under certain circumstances, hazardous activities, specific accidental death circumstances, unlawful conduct, or other events identified in the contract.

Policies can differ significantly, and state law may also affect how certain exclusions are applied. The actual policy should be reviewed before determining whether a particular exclusion prevents payment of benefits.

Can insurers broadly interpret exclusions?

An insurance company may interpret its policy when reviewing a claim, but that does not mean its interpretation is automatically correct.

If the insurer applies an exclusion more broadly than the policy language supports, the beneficiary may be able to challenge the denial.

Who decides if an exclusion applies?

The insurance company usually makes the initial coverage decision.

If the beneficiary disagrees, the dispute may continue through an internal appeal, negotiation, arbitration when applicable, or litigation. A court may ultimately determine how the policy should be interpreted and whether the exclusion applies.

Can exclusions be challenged in court?

Yes. A beneficiary may be able to challenge an exclusion when there is disagreement over the policy language, the facts surrounding the death, or the insurer's interpretation of the contract.

Whether a court challenge is appropriate depends on the policy, applicable law, and circumstances of the claim.

What if the insurer is acting in bad faith?

Insurance companies generally have legal obligations when investigating and handling claims. If an insurer unreasonably denies benefits, fails to properly investigate a claim, or otherwise violates applicable insurance law, additional legal remedies may be available.

Bad faith standards and remedies vary by state and by the type of insurance plan involved.

An attorney can review the insurer's conduct, the policy, and the claim history to determine what options may be available.

Why should I choose Morgan & Morgan?

Life insurance disputes can involve complicated policy language, detailed claim records, and insurance companies that may strongly defend their decision to deny benefits.

Morgan & Morgan has the resources to investigate disputed claims, review the policy and insurer’s reasoning, gather supporting evidence, and challenge improper denials when appropriate.

Our attorneys fight For The People, not the insurance companies. If you believe a life insurance claim was wrongly denied because of a policy exclusion, we can review what happened and explain your legal options.

Contact Morgan & Morgan today for a free case evaluation. The Fee Is Free™: you don’t pay unless we win.