When Does Life Insurance NOT Pay Out?

5 reasons why a claim on your policy might get rejected.


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By Cai Bradley
Updated on Wednesday 15 May 2024

Man checking life insurance documents

It’s undeniably an unpleasant thought, but it’s important to acknowledge that your life insurance policy may not pay out under some circumstances.

In order to make sure that you don’t get any nasty surprises, and to give you peace of mind, you should be aware of the most common reasons for life insurance not paying out.

Some of the situations where your life insurance can become invalid or void can be tragic – such as when a policyholder commits suicide during the first year of their policy – but they can also be as simple as lying on your application or outliving your policy. 

It has been reported that 98% of life insurance policies pay out in the UK, but what happens to the other 2%?

Here’s a list of circumstances where your life insurance may not pay out in the UK.

1. If you have lied on your life insurance application

Lying on an application is one of the main reasons for life insurance policies not paying out, as it is considered to be either non-disclosure or fraud.

For example, if you develop a serious illness and don’t let your insurance provider know (either on your application or during the policy’s term), your claim may be rejected.

You must always be honest with your insurer and avoid the temptation of lying, even if it would initially lead to cheaper premiums.

What happens if you lie on a life insurance application? If you have a whole of life insurance policy and pass away, the insurer will refuse to pay out if they discover that you have lied on your application (about an existing illness or being a smoker, for example). 

2. When you outlive your life insurance policy

If you take out term life insurance, your cover will only last a certain amount of years, so there is the possibility of outliving the policy. When this happens, the provider is not obliged to provide a pay out in the event of your death.

For example, if you’re 45-years-old and take out a 25-year fixed-term life insurance policy, your loved ones will only receive a pay out if you pass away before you reach your 70th birthday. If you die after your life insurance policy has ended, they will not receive anything.

Note that many fixed-term life insurance plans are designed to end before the policyholder’s 70th birthday, so be sure to check your policy’s terms before committing to it.

If you would prefer to have cover that is guaranteed to pay out, regardless of your age, you may want to consider whole of life insurance.

3. Suicide

In the sad event of a suicide, some life insurance companies will not pay out if the policy is less than 12 months old. However, most policies will provide a pay out as normal after this period ends.

This scheme is essentially in place to minimise the risk of someone taking out a large policy with the intention of committing suicide soon after, as a way of ensuring that their family is financially protected.

Life insurer LV= has previously rejected suicide claims as they considered it non-disclosure about the mental health of the policyholder, linking it to the aforementioned point, where the policyholder is deemed to have ‘lied’ on their application.

4. If you move abroad or travel long-term

Some life insurance policies can become void or invalid if you travel outside certain areas for an extended period of time or move abroad.

Generally, insurers may be inclined to void your cover if you travel outside of the following areas for more than 12 consecutive months:

  • EU
  • USA
  • Canada
  • Australia
  • New Zealand
  • Isle of Man
  • Channel Islands

If you’re someone who enjoys travelling for months or even years at a time, you should always notify your insurer when applying for cover or during your policy’s term, as this may impact the type of cover you need.

5. When you avoid updating your policy

In an ideal world, you would set up your life insurance policy at a young age and never have to think about it again. Unfortunately, this isn’t the case, as you need to inform your insurer of any life changes and update your policy if you need further cover.

A ‘life change’ could be considered any major event, including getting married, having children, buying a house, getting a job, moving to a more expensive house, and getting a better job. You should amend your life insurance policy or at least inform your provider when any of those occur as your existing policy may not be sufficient and won’t cover you for all circumstances.

It may be tempting to avoid this, as it may increase the cost of your premiums, but it must be done for your policy to remain valid.

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Making sure your life insurance will pay out

The first step towards making sure that you or your loved ones get the pay-out that you’re hoping for from your life insurance policy, is taking out the right level of cover.

There are various types of life insurance policies available, so it’s important that you take out a level of cover that provides you with the right amount of protection for your personal preferences. For example, you may want to consider whole of life insurance if you want to guarantee that you won’t outlive your policy.

You should also be careful when choosing which provider you purchase a policy from, as the cost and cover provided does vary between each insurer. We recommend getting quotes from a variety of providers, which you can do right now by tapping the button below:

If you’re not ready to get a life insurance quote and would like more information first, be sure to read our related guides:


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