Can a Life Insurance Claim Be Denied for Making Bad Decisions?
When a loved one passes away, the last thing anyone expects is a cold letter from a life insurance company denying the policy payout. But for many grieving families, that’s exactly what happens—and often, the reason is buried in little-known exclusions buried deep in the policy.
What surprises many people is that a life insurance claim can be denied not just for fraud or nonpayment—but because the insurer believes the policyholder made a “bad decision.” These denials typically stem from actions deemed reckless, illegal, or otherwise excluded from coverage. Unfortunately, most people never read the fine print of their policies to see these traps coming.
In this article, we explain how insurers use vague or obscure policy clauses to deny claims based on the behavior of the deceased. We also discuss how to challenge these denials and protect your right to collect the death benefit.
How “Bad Decisions” Can Cost a Life Insurance Payout
Life insurance companies are not in the business of paying claims easily. Their bottom line benefits when they find a reason—any reason—not to pay. One of their favorite tactics is to cite policy exclusions tied to certain risky behaviors, criminal activity, or substance use. These clauses are often vague, misunderstood, or completely overlooked during the application process.
Let’s take a closer look at how these technicalities work—and why you should be concerned.
Breaking the Law, Even in Minor Ways
Most policies include language excluding payouts when the insured dies while committing a crime. That sounds reasonable, until you realize that even misdemeanor offenses could void coverage.
Consider this: If someone dies in a car crash after driving with a suspended license, trespasses on private property during a hike, or uses someone else’s prescription medication, the insurer may argue the death occurred during illegal activity—and deny the claim.
These denials often shock families. The policyholder didn’t rob a bank or commit a violent act—they just made a poor choice. But insurers often don’t care about the severity. If they can tie the death to a violation of the law, they will try to avoid payment.
Drug Use—Legal and Illegal
It’s widely known that life insurance companies can deny claims if the deceased died while using illegal drugs. But what’s less known is that even prescription medication can trigger a denial, especially if the dosage was misused or the medication wasn’t prescribed to the policyholder.
In one growing area of controversy, insurers are also pushing back on claims involving marijuana. Even though cannabis is legal in many states, it’s still illegal at the federal level. That means some insurers will cite federal law to deny claims—even if the death had nothing to do with cannabis use.
Simply put, drug-related exclusions are among the most abused clauses in the insurance industry. Whether it's a trace of an illicit substance or a high dose of a prescribed one, insurers will try to build a narrative that the death was either criminal, reckless, or self-inflicted.
Alcohol-Related Claim Denials
You might be surprised to learn that alcohol use is also a common reason for denied claims—even though drinking is legal.
If a policyholder failed to disclose excessive alcohol consumption on their application, the insurer might argue that omission was a material misrepresentation. That alone could nullify the policy—even if alcohol played no role in the death.
In other cases, insurers point to alcohol-related incidents, like binge drinking or alcohol poisoning, as evidence that the death was caused by “reckless” or “intentional” conduct. These labels can be enough for insurers to invoke exclusions and block payouts.
The troubling part? These judgments are often made without full context and based solely on toxicology results or assumptions—not facts.
What to Do if the Insurance Company Denies Your Claim Based on Behavior
Just because an insurance company claims your loved one’s death falls under an exclusion doesn’t mean they’re right. These companies often overreach, twisting policy language to justify denial and hoping grieving beneficiaries won’t fight back.
That’s where we come in.
Our law firm has decades of experience overturning wrongful life insurance claim denials. We know how to challenge “bad decision” exclusions. We’ve fought cases involving criminal charges, drug use, alcohol-related deaths, and even disputed suicide claims. We understand the fine print—and how insurers try to manipulate it to protect their profits.
We also know that every case is different. Maybe the policyholder was unaware their behavior could void coverage. Maybe the cause of death has been misclassified. Or maybe the insurer failed to disclose important policy provisions at the time of purchase. Whatever the details, we’ll investigate thoroughly and fight for what’s right.
If you’ve received a claim denial letter citing risky behavior, don’t go it alone. Contact us today for a free consultation. We’ll review the policy, explain your legal options, and only take your case if we believe we can win. There are no upfront fees, and you don’t pay unless we recover for you.