Although the general public may feel cynical about insurance companies at times, the reality is that an average of 98% of life insurance claims are paid out each year. To give one example, Irish Life paid out 99% of life insurance claims in 2024.

That‘s a really high payout rate, and underlines the fact that life insurance remains a crucial element of your financial planning, providing financial protection if you die during the term of the policy.

So, even though the payout rate is consistently high, what happens in the 2% or so of claims that are denied? Here we look at the reasons that claims are denied or refused by life insurance companies.

Table of Content

Reasons for a denied life insurance claim

Given the high rate of successful claims on life insurance policies, what are the reasons that an insurance company might refuse a claim?

Non disclosure occurs where you have given inaccurate or misleading information to the life insurance company, usually at the initial stage of setting up your policy.

Lifestyle factors that may lead you to being considered a higher risk candidate for life insurance such as smoking, a dangerous job or hobbies, or a high BMI, for example, must be disclosed initially when you purchase a life insurance policy.

Likewise, your health history or having a current or historic health condition must also be disclosed to the insurance company at the start of the policy.

The general rule of thumb is that, if you are in doubt as to whether information regarding your lifestyle, hobbies, job, or health should be included in your life insurance information, then you should disclose it and be as transparent as possible.

You must continue paying your monthly premiums in order to maintain your life insurance cover. Your life insurance policy will not be in force if you do not maintain payments and you will not be covered by the policy.

If you are unable to make the monthly payments, if you are unemployed for example, you should contact your insurers, ideally before arrears build up.

There may be options, such as suspending the policy, that the insurance company can offer you to address the situation in the short term. Once you are able to resume payments, the policy can then be re-instated.

If there is suspected fraudulent activity, then the claim may be investigated and payment will not be made.

Life insurance fraud, such as faking a death, may seem like a movie plot, but forgery, identity theft, and fraud can result in life insurance claims being denied, although this is rare.

Unfortunately, even though the statistics suggest that life insurance companies are diligent in paying out claims, there are circumstances where the policyholder’s death is not covered by their life insurance policy.

Generally, death by suicide or intentional self inflicted injury in the first 12 months of a life insurance policy, although very tragic, is excluded from cover, as is death as a result of illegal or criminal acts.

What to do if a life insurance claim is denied.

Although the absolute vast majority of life insurance claims are paid by insurers each year, and life insurance companies are subject to stringent oversight by the Central Bank in Ireland, it can be reassuring to know that there are steps that you can take if a claim is denied.

  • Engage fully with the claims process

  • Follow insurance company’s appeals process

  • Seek professional advice

Engage fully with the claims process

This is more preventative than a remedy for a denied claim, but it will help to improve the outcome and make the claim move more smoothly if you ensure that you are as thorough, transparent, and accurate as possible in filling out the initial claim form.

It will also improve the efficiency of your claim if you ensure, as much as possible at a difficult time following bereavement, to provide any information, clarification, or documentation requested by the insurers as quickly as possible.

Follow insurance company’s appeals process

By law, all insurance companies must have a process for handling complaints, and you can make a formal complaint if you are unsatisfied with the outcome of your claim.

If a life insurance claim is denied, you must first follow the procedure and make an internal appeal. You will most likely be provided with information on how to appeal the decision if you are informed by your insurer that a claim has been denied.

Seek professional advice

If you have exhausted the insurance company’s appeals process and are still unhappy with their final response, you can contact the Financial Services and Pensions Ombudsman (FSPO).

The FSPO is an independent, statutory body who investigates complaints made insurance companies, including life insurance companies, and other financial services companies. There is a 6 year time limit to bring a case to the FSPO.

It may also be possible and advisable to seek independent legal advice on your options at this stage.

Author: Séamus Ó Doirín | Chief Insurance Editor

Séamus Ó Doirín is a Donegal based QFA who has been writing about insurance since 2020. His main focus is getting people the best value for insurance in the Irish market. His writing covers all areas of insurance and is a valuable part of the Compare Insurance team. 

Tailored Life Insurance Quotes

We are Ireland’s first impartial insurance comparison website.

Related Topics

> Life Insurance Overview
> Dual Cover Life Insurance
> Cheap Life Insurance
> Disclosing Medical Information for Life Insurance

Recent Articles

Get the lowest premiums by comparing all the policies in the Irish market

Choose your insurance type, fill out the relevant assessment and speak to a central bank regulated insurance advisor