Types of Death Excluded From Life Insurance Coverage

Life insurance may not cover death from fraud, illegal activity or an undisclosed pre-existing condition. MoneyGeek describes the circumstances in which an insurance company may opt not to pay out a life insurance policy.

By Mandy Sleight

Edited by Denise Cristobal

Updated: November 18, 2024

Advertising & Editorial Disclosure

Almost all types of death, including accidental, natural and self-inflicted deaths, may be covered by life insurance. However, some circumstances may cause the life insurance company to investigate the cause, which could mean the insurer does not pay the death benefit claim. This scrutiny typically involves examining the cause of death to confirm if it falls under any life insurance exclusions. Some reasons life insurance may not pay out include insurance fraud, risky or illegal activities and undisclosed pre-existing conditions.

Understanding these common life insurance exclusions will help you avoid surprises at a critical time. For instance, a policy might not cover a scenario such as dying right after getting life insurance without proper disclosure of health issues or deaths related to undisclosed hazardous hobbies.

TABLE OF CONTENTS

Types of Death That Life Insurance Does Not Cover
Types of Death Covered by Life Insurance
FAQ About Deaths Not Covered by Life Insurance

Key Takeaways

It's wise to thoroughly review your policy, especially the inclusions and exclusions, to understand what may affect your claim payout.

The Slayer Rule dictates that a death claim payout goes to the contingent beneficiaries or the insured’s estate if the primary beneficiary was involved in the insured’s murder.

A life insurance policy should cover suicide if the suicide clause has expired, typically after the first two years of a policy.

Types of Death That Life Insurance Does Not Cover

Depending on the cause and circumstance surrounding an insured’s death, the insurer may investigate the claim and choose not to pay a beneficiary’s request for a death claim payout. The list below includes common exclusions to a life insurance policy.

Lying or Fraud

It is considered fraud if you lie or omit something on your life insurance application. Lying about the following may lead to life insurance not paying out:

Family health history
Your health history, including pre-existing conditions
Travel plans, especially to dangerous locations
Risky hobbies or occupation

Risky Hobbies or Activities

If you participate in risky hobbies, your death claim may not be covered by life insurance if these activities lead to your death. If you are honest on your application, the insurer may have a separate exclusion to sign as part of the application stating these activities are not covered, which can include:

Scuba diving
Flying a private plane
Bungee jumping
Hang gliding
Auto racing
Rock or mountain climbing
BASE jumping

Murder (By the Beneficiary)

Homicide in itself generally falls under life insurance coverage, but the circumstances surrounding the death may dictate who receives the life insurance payout. If the primary beneficiary murders the insured or is involved in their murder, they are no longer eligible for the death benefit due to the Slayer Rule. Instead, the contingent beneficiaries will receive the death benefit, or it will go to the insured's estate.

Suicide Within the Suicide Clause

Life insurance policies have a suicide clause, which prevents the death benefit payout in the first two years of the policy if the cause of death is suicide. This clause is in place to prevent someone from purposefully dying right after getting life insurance. After the two-year window, insurers typically cover death by suicide. If the insured dies due to a drug overdose, the life insurance company may deny the claim if they can prove the overdose was deliberate.

Terrorism or War

Some insurance companies may include terrorism or war in their life insurance policy exclusions, although it’s not common. For this reason, depending on rank and deployment status, active-duty military members might not qualify for life insurance. If the insured is on active duty, it’s best to speak with an insurance agent to determine which companies do not have this life insurance exclusion if you want coverage.

Death Without a Beneficiary (Or They Die Before You)

If you don’t designate a life insurance beneficiary — or they predecease you — the life insurance company may not be able to pay the death benefit directly to a loved one.

Not Naming a Beneficiary: If you don’t name a beneficiary, the death benefit proceeds will go to your estate and be subject to probate. You also can’t control who gets the money.
Your Beneficiary Predeceases You: If your beneficiary dies before you, the money will go to your estate if you don’t have a contingent beneficiary. This is why it’s crucial to choose more than one beneficiary and update your policy if one of your beneficiaries dies before you.

Types of Death That Life Insurance Covers

In instances of natural death, illnesses and accidents, your beneficiaries will usually get the death benefit payout from your life insurance policy. The list below illustrates the types of death that life insurance coverage includes:

Natural Causes

Life insurance does pay for natural death, including dying from old age or a disease like heart disease or cancer. Dying of natural death means dying from the body shutting down due to an internal factor rather than an external factor, like an injury or accident.

Accidents

Life insurance covers accidents, which can include accidental death from overdose, poisoning, drowning, auto accident or other ways to die.

Murder

The beneficiary will receive the death benefit in the event of the insured’s murder, but only if the beneficiary did not commit the murder or play a part in it. If it’s found the primary beneficiary is involved in the murder, the insurer disqualifies them from receiving the death benefit due to the Slayer Rule. The death benefit then goes to the contingent beneficiary or the estate if there isn’t a contingent. Choosing the right beneficiary is important to ensure your death benefit is used according to your wishes, which may not be the case if the payout goes to your estate.

Suicide After the Suicide Clause Ends

Once the two-year suicide clause contestability period has expired, life insurance policy coverage typically extends to death by suicide as long as there is no other clause in the policy that excludes it.

Pandemic illness

Although pandemics are not new, their uncertainty with life insurance is. Fortunately, most insurers still pay out pandemic illness deaths as natural causes. However, if you are looking to buy life insurance now, you may have to answer a questionnaire about your health specific to COVID-19. Depending on your responses and the insurance company, this could cause your policy to be delayed, postponed or denied.

FAQ About Deaths That Life Insurance Does Not Cover

Here are answers to commonly asked questions about standard exclusions in life insurance policies and situations where a payout after death may not occur.

What does life insurance cover?

Life insurance covers deaths due to natural causes, accidents, murder (unless the beneficiary is involved) and suicide after the suicide clause period.

What does life insurance not cover?

Life insurance exclusions often include deaths from undisclosed pre-existing conditions, certain risky activities, fraud and intentional illegal acts. These are common reasons life insurance won't pay out.

Do you get life insurance if you die of old age?

Yes, dying of old age is covered as a natural cause under life insurance policy coverage.

Does life insurance cover deaths from cancer?

Life insurance does cover deaths from cancer since it falls in the natural causes category. However, if the insured had cancer prior to filling out the application and didn't report it, the insurance company has the right to review the claim and deny the payout.

Does life insurance cover deaths from heart attacks?

Yes, deaths from heart attacks are generally covered as natural deaths under life insurance policy coverage.

Will life insurance cover deaths from cirrhosis?

Death related to cirrhosis is covered unless linked to undisclosed conditions or behaviors that violate the policy's terms.

Does life insurance cover accidental death?

Yes, life insurance covers accidental death, including unforeseen events like traffic accidents or falls.

Does life insurance cover overdose?

An overdose can be covered unless proven intentional or undisclosed risky behaviors are involved.

Does life insurance cover deaths by suicide?

Deaths by suicide are covered after the initial two-year contestability period, known as the suicide clause, unless specifically excluded thereafter.

Does life insurance cover murder?

Life insurance covers murder unless the beneficiary is proven to be involved, adhering to the Slayer Rule, which prevents payout under such circumstances.

What happens if you die right after getting life insurance?

If an insured person dies right after getting life insurance, what happens next depends on the cause of death. If the death is the result of natural causes or something not specifically excluded from the policy, then the beneficiary should receive the payout. However, the insurer has a right to contest the death benefit claim request in the first two years of the policy. If it’s found the insured committed fraud, omitted something from the application or died by a cause not covered by life insurance, then the claim may be denied.

Why do insurers deny life insurance claims?

Insurers deny life insurance claims for several reasons. These include death occurring during the contestability period, the type of death not being covered by the policy, failing to disclose information on the application, lying on the application or failing to pay premiums and allowing the policy to lapse.

What happens if you don't die during term life insurance?

If the insured does not pass away during the term life insurance period, the policy expires, and no benefit is paid out. This is one of the term life insurance exclusions — only death within the term period triggers a payout.

What happens if the insured and primary beneficiary are killed in the same accident?

If the insured and primary beneficiary are killed in the same accident, the death benefit will go to contingent beneficiaries. The payout typically goes to the insured’s estate if no contingent beneficiary is named.

Can you collect life insurance before you die?

It depends on the type of policy. Whole and universal life insurance policies accumulate cash value, which policyholders can borrow against or withdraw. Additionally, many policies include living benefits, such as accelerated death benefits, that provide early access to funds in cases of terminal illness. These features are part of what life insurance covers beyond the standard death benefit, offering flexibility for various financial needs during the policyholder's lifetime.

Can you buy life insurance for someone who is dying?

Although it is possible to purchase life insurance for someone who is terminally ill, options are limited and often costly. Companies may have disqualifying conditions for life insurance. Many policies exclude pre-existing, severe illnesses, and insurers may deny coverage or offer only limited types of coverage, such as guaranteed acceptance life insurance policies that don’t require health questions but come with higher premiums.

About Mandy Sleight

Mandy Sleight is a licensed property, casualty, life and health insurance agent with 20 years of experience in the industry. She has worked for major insurance companies like State Farm and Nationwide, and most recently as the Operations Coordinator for a startup employee benefits company.

Sleight holds a business administration and management degree from the University of Baltimore and a master's in business administration from Southern New Hampshire University. She uses her vast knowledge of insurance and personal finance to create easy-to-understand and engaging content to help readers make smarter choices with their budgets and finances.

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