When
a life insurance claim is denied, it's usually because the death occurred within the first 2
years of the policy being "In Force", which is known as the contestability period, and it's discovered
the applicant for life insurance intentionally lied on the application to get the life insurance coverage, or the
insured person committed suicide within the first 2 years of being insured.
Once
the contestability period expires (first two years), and death occurs, the life insurance policy will pay
out a death benefit to the beneficiary.
Other
situations where a life insurance death benefit payout may be denied may include death that occurs as a result of an act of war, or there was an exclusion rider on the life insurance policy excluding coverage for a specific activity; such as, an aviation
exclusion for recreational pilots.
