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What Does Life Insurance Not Cover?

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Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency...

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Reviewed byJoel Ohman
Founder, CFP®

UPDATED: Mar 13, 2020

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Life insurance is supposed to be “simple”…the policy everyone understands. You pay for the insurance, and if you die while the policy is active, your beneficiary gets the money. This is most often times the case.

But there are some instances in which life insurance benefits may not be paid out in the event of the insured’s death. Let’s take a look at some more common reasons that may void a life insurance policy.

1. A life insurance policy would be voided during the discovery period, usually the first two years of the policy’s inception, if any information on the application was purposefully inaccurate. This includes misrepresentation or blatant fraud. After the two year discovery period, the life insurance company must typically pay any claim for benefits.

2. Benefits may be denied in the event the insured was determined to have put themselves at obvious risk of bodily injury or death.

3. Life insurance also does not generally provide benefits in the event of an insured committing suicide within the two year discovery period. However, benefits are typically paid in the event of a suicide taking place after the discovery period.

4. Life insurance doesn’t cover anything in the event the premium is not paid in a timely manner. Policies can be cancelled for “non pay” with a relatively short notice, usually within 10 days of a late payment, depending on the type of policy you purchased. If your insurance premium isn’t paid, you may not be leaving any benefits behind.

Get quotes online or visit and independent agent to make sure you purchase the right life insurance policy at the right price.

There are several life insurance options available in the marketplace today; including whole life insurance, term life insurance, group life insurance, no load life insurance, and universal life insurance.

You may need to consider a guaranteed issue life insurance policy if you are having difficulty obtaining a life insurance policy in the standard market.

Read more: How much life insurance do I need?

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