Life insurance policies can be so valuable to your family after you are gone. Having that financial buffer there means that they don’t have to stress about money when they are already experiencing a difficult loss. But when you take out your policy, it’s important to be aware that it’s not guaranteed to pay out every time. 

In fact, there are a number of reasons why life insurance providers will refuse to pay out and it’s important that you know what those reasons are, so you can ensure that you are always covered. Here are the top reasons why life insurance companies won’t pay out and what you can do about it. 

Outliving Your Policy 

A lot of people don’t realize that a lot of life insurance policies have a limited time span on them. If you outlive your policy, you will not get a payout if you die afterward. So, it’s important that you know exactly when your policy expires and you renew it immediately. There are a lot of different types of life insurance, so you can also find policies that don’t expire if you would prefer. Either way, you need to know exactly how long you are covered for. 

Failing To Pay 

If you haven’t been keeping up with the payments, this could invalidate your policy and your family won’t be able to make a claim. In this situation, the insurance provider should give you some time to pay if you fall behind. Sometimes, a public adjuster can mediate disputes about insurance payouts and they may be able to state your case if your family does not think you were given adequate time to make up the payments. However, if you fail to make the payments repeatedly, this doesn’t leave you in a good position. 

Not Declaring Changes To Your Situation

Your insurance premiums and the level of cover you receive are all based on your specific situation. If that situation changes and you don’t inform your insurance provider, they could invalidate your policy and refuse to pay a claim. If, for example, you are diagnosed with a serious illness and you don’t tell them, it’s very unlikely that your family will be able to make a claim. But it’s not just health issues you have to tell them about, you should also let them know about an increase in earnings, moving house, having kids, or getting married. People often avoid telling their insurance provider about these things because they worry that the price of their policy will increase. In many cases, it will, but the level of coverage will change too. If you don’t update your details, you risk having claims denied and you won’t have adequate cover for your family, so you should always be upfront with your provider. 

If your life insurance claim is denied for any reason, you may be able to challenge the decision. Once an independent body has examined the case and decided whether the denial was fair or not, your family may eventually be able to make a claim. However, you need to make sure you avoid this situation in the first place by handling your policy in the right way.