When Do Life Insurance Benefits for Adult Children End—and Will the Insurance Company Tell You?
If you’re paying life insurance premiums for your adult child, you might assume coverage continues as long as the premiums are paid. Unfortunately, that assumption could cost you everything.
Life insurance companies often include quiet cutoffs for dependent child coverage, typically based on age or student status. But here’s the catch: insurers rarely notify policyholders when coverage ends. They keep collecting premiums—even after coverage has lapsed—and then deny claims when tragedy strikes.
This article explores a real-life case from New York where a grieving mother discovered, far too late, that her daughter’s coverage had ended without warning. It’s a cautionary tale of why you should never accept a claim denial at face value—and why legal help is essential.
Group Life Insurance Can Be Deceptively Tricky
Many employer-sponsored life insurance plans offer the option to extend coverage to family members, including spouses and children. These policies often seem simple, especially when premiums are conveniently deducted from your paycheck.
That was the case for Sheila, a dedicated high school teacher who obtained life insurance coverage for herself, her husband, and her teenage daughter, Sara. When she enrolled, Sara was 17 years old. The family never imagined the policy might one day be disputed.
Like many consumers, Sheila didn’t scrutinize the policy's fine print. She didn’t need to—at least not yet.
Age Cutoffs for Dependent Children Are Often Hidden in the Fine Print
Sheila’s employer-provided life insurance plan included age-based limits for dependents. According to the policy, a child could remain covered until age 19, or up to age 24 if enrolled full-time in college. However, the policy had no language clearly stating what would happen at age 25—and crucially, it never stated that the insurer would notify the policyholder when coverage ended.
Sara turned 25 in 2014. She was still a full-time student, pursuing a master’s degree. Sheila, unaware of the policy limitations, continued paying premiums automatically through her paycheck. There were no warnings, letters, or alerts from the insurer.
Everything appeared normal—until tragedy struck.
A Tragic Accident, Followed by a Shocking Claim Denial
When Sara was just shy of 26, she was killed in a car accident during a road trip across the United States. The family was devastated. After grieving, Sheila filed a claim for the death benefit she believed had been in place since Sara was 17.
Instead of support, Sheila received a claim denial letter. The insurer stated that Sara’s coverage had lapsed on her 25th birthday, rendering the policy void. They returned two years of premiums and denied any responsibility for the $100,000 death benefit.
Sheila was blindsided.
The Insurance Company’s Tactic: Keep the Premiums, Deny the Coverage
The insurer’s position was that Sheila had continued paying premiums “by mistake,” and they were under no obligation to pay the claim. Unfortunately, this kind of maneuver is all too common.
Life insurance companies are under no legal obligation to proactively inform policyholders when a dependent child ages out of coverage—unless the policy or state law says otherwise. They may simply continue collecting premiums and wait until a claim is filed before raising the age cutoff as a defense.
This is one of the most deceptive—but common—tactics used to deny valid life insurance claims.
Legal Representation Changed Everything
Sheila wisely contacted a life insurance attorney who had handled similar cases. The lawyer advised her not to cash the refund check and immediately began preparing legal action.
After the insurer refused to reverse its decision, Sheila’s attorney filed a lawsuit that eventually reached the U.S. Court of Appeals for the Second Circuit.
The court sided entirely with Sheila.
It ruled that the insurer acted in bad faith by continuing to collect premiums while quietly terminating coverage. Additionally, the court found the policy language ambiguous—especially on the insurer’s obligation to notify Sheila of any lapse. Under legal doctrine, ambiguity is construed against the insurer, especially when they wrote the policy.
The result? The court ordered the insurer to pay the full $100,000 benefit, plus interest.
Why This Case Matters—and What You Should Learn From It
This case underscores a critical point: never assume your life insurance claim denial is final or legitimate.
Life insurance companies rely on policyholders’ lack of knowledge. They assume most people won’t read the fine print, and they bet that few will fight back once a claim is denied. If they can find even a minor policy technicality—such as a child's age—they'll use it to deny payment, even if they’ve collected years of premiums.
But courts don’t always agree with that approach.
If a company continues accepting money without clarifying that coverage has ended, courts may find that the policy remained in force. This is especially true when the policy lacks clear terms or when the company fails to notify the policyholder.
Can Insurance Companies Deny Claims After Accepting Premiums?
Yes, and they often do. But whether that denial will hold up in court depends on a variety of factors:
Did the insurer clearly define the cutoff age in the policy?
Was the language ambiguous about notification requirements?
Did the insurer continue accepting premiums after coverage should have ended?
Was there any effort made to inform the policyholder of the lapse?
If the answer to these questions favors the policyholder, an experienced life insurance lawyer can often reverse the denial.
What Should You Do If Your Claim Is Denied?
The worst thing you can do is accept the denial without question. Many people cash a refund check or assume the insurance company knows best. That’s often a costly mistake.
Instead, take the following steps:
Do not cash any refund check until you’ve spoken with an attorney.
Request a copy of the full policy, including all rider provisions and plan documents.
Save all correspondence from the insurer, especially the denial letter.
Contact a life insurance lawyer who regularly handles denied claims involving dependent coverage and age-based denials.
Our firm has helped countless clients in similar situations. We understand the tactics insurers use and how to challenge them successfully in court.
Call Us—We Fight for Families Nationwide
Life insurance should be there when you need it most—not leave you stranded due to unclear fine print or deceptive denials. If you’ve lost a loved one and your life insurance claim was denied due to a dependent’s age, don’t walk away from the benefits you’re entitled to.
We represent clients in all 50 states and fight to get claims paid. Call us today for a free consultation. We’ll review your denial, explain your legal rights, and stand by your side to pursue the payout your family deserves.