Is a life insurance policy guaranteed to payout?
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Is a life insurance policy guaranteed to pay out?

Is a life insurance policy guaranteed to pay out?

Having a life insurance policy in place can give you peace of mind that your loved ones will be taken care of financially after you have passed away.    

A lump sum payout is made following a successful claim. It will be paid to the beneficiary of the policy, or the person/persons named in your will.

However, due to the nature of this type of cover, you won’t be around to oversee that claim. So how can you guarantee that your life insurance policy will actually payout?

What percentage of policies actually payout?

Not everyone claims on a life insurance policy.  If you have a term life insurance policy then this only runs for a certain period of time. If you outlive the term, then you’ll never have to make a claim on the policy.  But you’ll want to know that if you die within the term, that your family will receive the money that you’ve insured yourself for.

The good news is that if a claim IS made, then it is likely to be successful.  According to the Association of British Insurers, 97.6% of all claims made in 2018 were successful. 

What would cause a life insurance claim to be refused?

As mentioned above, payouts for life insurance are extremely high so you shouldn’t worry too much about a claim being denied.   However, there are a small amount of claims that don’t result in a payout. So why is this?

There are three main reasons why an insurer would deny a claim.  These are:


For obvious reasons, death by suicide is not normally covered by a life insurance policy.  You may find that some insurers do include it, however strict conditions usually apply. Payouts would not normally be made if the death occurred within the first 12-24 months of the life insurance policy being taken out.  This safeguards insurers against people taking out large policies, and then taking their own life to get their family out of financial difficulties.


Non-disclosure of information could be seen as insurance fraud.   Insurers base premiums on a number of factors such as age, health etc, so if you’ve purposely not told them about a pre-existing health condition, or the fact that you smoke, to try and get a cheaper policy, this will invalidate any claim made.  If you want to guarantee a payout for your beneficiaries then make sure you are completely truthful when filling in your application.

Missed payments

Monthly payments are required to keep your life insurance policy active.    Most insurance providers will offer a grace period of 30 days to make sure that these payments are made.  If payments are missed, then the insurance company may cancel your policy. This could result in any subsequent claims being denied.  This is regardless of how long you have been paying into your policy. Always check the terms and conditions to find out what happens if you were to miss a payment.

Speak to a life cover specialist who can help you to search the marketplace.  They will be able to find the most comprehensive cover at a price that will suit you.  

The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Protect.


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