When Does Life Insurance Not Pay Out?

Life insurance policies are designed to give you peace of mind that your loved ones will be financially secure when you pass away. However, there are circumstances when an insurer may not pay out on a claim. Here are some common reasons why:

Reason	Explanation
Fraud or non-disclosure	Withholding information or lying about your health and lifestyle could void your policy, as well as failing to disclose high-risk hobbies.
Suicide	Most policies have a suicide clause that prevents payout within the first 12-24 months of taking out the policy. Claims can also be rejected if the policyholder withheld information about their mental health.
Terminal illness	Insurers may pay out an early lump sum if you have a rapidly growing or incurable illness, but only if you have a certain amount of time remaining on your policy.
Changes in life circumstances	If you get married, have children, move house or change jobs, you need to keep your insurer informed and update your policy accordingly. Failure to do so could lead to being underinsured or having your claim rejected.
Geographical location	Living or travelling outside certain geographical locations for over 12 months may cause your policy to become void.
Outliving a term policy	If you have term life insurance and outlive the policy, your insurer will not pay out.
Lapsed policy	If you fail to keep up with your monthly payments and your policy lapses, your insurer will not pay out.
Missing documents	If you cannot supply all of the required documents, your insurer may reject your claim.

If your claim is rejected and you believe it to be unfair, you can make a complaint to the insurer and escalate it to the Financial Ombudsman Service if necessary.

It’s important to read the terms and conditions of your policy carefully and to disclose any relevant information when applying for life insurance. This will ensure that your loved ones are protected in the event of your death.