What is the probability of a death claim being paid out on a term life insurance policy?

Actually, very few claims are paid on term life policies.

There are a few main reasons for this lack of payout on term policies, including:
  • Policies cancelled for non payment of premiums.
  • Term life insurance policies being cancelled by the insured's request before the term expires.
  • The term expiring while the insured is still alive.
A study completed by Penn State University discovered only 1%-2% of all term life insurance policies paid out a death benefit on the policy.

Learn more about term life insurance and probability of death