LIFE insurance policies can be beneficial to individuals as they provide financial coverage as protection against the unlikely event of death. Generally, these policies work with the idea of a lump sum payment. But what are the chances that your life insurance policy will be reimbursed?
There are times when your life insurance won’t pay you. From the involvement of drugs in the causes of death to deaths by suicide, there are few common cases where all the benefits of a life insurance policy are denied. Take a look at these five common cases:
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Involvement of drugs/alcohol in cause of death
When a life insurance policy is purchased, the insurer conducts a background check to ensure that no one has used drugs in the past six months. If there is evidence of drug use within this range, chances are there is a denial of benefits on the policy.
Whether legal drugs or illegal drugs, any evidence of their use can void police payouts. Additionally, if there are traces of alcohol in your bloodstream at the time of death, there is a good chance that drug involvement is suspected in your death, and life insurance benefits will be refused.
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Homicide case
Deaths caused by homicide are also disallowed on life insurance policies. If it was a suicide, the life insurance provider could still pay the claim and, in some cases, provide additional coverage for suicide claims. However, if a death is a homicide, in most cases there will be no payment even after a death claim is filed. Homicide is one of the most common reasons why life insurance won’t pay.
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Suicide
Suicide is one of the leading causes of death in the United States today. Most of those who commit suicide suffer from health problems or financial difficulties. Even if these people do not plan to reveal their intentions to others, there are cases where family and friends recognize the signs leading to these types of deaths.
In some cases, there may be additional coverage for suicide claims. In rare cases, the company may send an investigator to determine with more certainty the circumstances of the death. However, in most cases, suicide requests are not paid and will ultimately result in the denial of benefits.
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Non-payment of insurance premium
A life insurance policy can be terminated if the insured does not pay their monthly premium. If a policy provider detects a drop in insurance premiums, they may cancel your policy. Even without payment of your premiums, it is possible for life insurance benefits to be denied due to non-payment of premiums.
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Death due to malpractice/unintentional injuries
In many cases, your life insurance provider will not agree to pay if you die from a long-term injury or illness, such as a car accident or even if it was caused by a malpractice. Other reasons include unpaid death benefits, life insurance lapses in specific cases, intent to purchase mismanaged or canceled policies, etc.
In a nutshell, these are the five common reasons why you won’t receive any benefits from your policy. Now make sure you read them before committing to any type of policy.