Life insurance policies are often denied due to simple mistakes on the part of the insured. It only takes a few minutes to make sure your life insurance policy is accurate and up to date. When you first inquire about a life insurance policy, your agent will explain all the different clauses, endorsements, benefits, and requirements. It’s up to you to pay close attention to what they tell you. This allows you to make sure everything is as accurate as possible.
Reasons Your Life Insurance Payout Is Denied
- False Information on Your Application
Lying on your insurance policy application is an immediate disqualification. In most cases, applicants give false information about the state of their health. If your insurance agent uncovers any indiscretions on your part, your policy will be canceled, and you will no longer be able to receive coverage. Be as honest as possible and provide as much information as needed that is easily verified by your medical history.
- Non-payment Can Cause a Lapsed Policy
Non-payment of your premium is the most common cause of a lapsed policy. Having the premium taken directly out of your bank account is the best way to ensure that they are paid on time every month. You will normally have a month or two to catch up if you miss a payment, but don’t wait to pay them. You run the risk of your policy lapse, and it may not be able to be reinstated.
- Your Beneficiaries Are Unaware of the Policy
Make sure that your beneficiaries are aware that you have a life insurance policy. This is a common reason that people don’t receive the death benefit payout. They didn’t know they had one coming! Make sure you put in your will the names of all your beneficiaries.
- No Secondary Beneficiary or Recent Updates
If you get a divorce or your spouse dies, your death benefit may remain in limbo if there is no secondary beneficiary listed. Any time you experience a life-changing event, notify your insurance agent, and update your life insurance policy. This may mean getting married or divorced, the death of a spouse, or simply wanting to cut someone out of your will.
- Excluded Cause of Death
Death benefit payouts will be denied if you die while committing a crime. Another exclusion is dying within the exclusionary period for suicide or during the waiting period right after you first apply for your policy. High-risk jobs or hobbies may also result in a denial if they weren’t disclosed when you filled out your application.
Cover Your Loved Ones at All Cost with Duane Weber Insurance
It’s important to know why many life insurance payouts are denied. If you have questions, contact the agents at Duane Weber Insurance. Our agents have years of experience and will guide you through the process of filling out the application and making sure you get the coverage you need and deserve. If you already have a life insurance policy, call one of our agents today to make sure it is accurate and as up to date as possible.