Can Life Insurance Be Denied Due to Criminal Activity? Yes—But It’s Not Always That Simple
Life insurance policies often contain a criminal activity exclusion, which allows insurers to deny benefits if the insured dies while committing a crime. However, these clauses are not always as clear-cut as insurance companies want beneficiaries to believe—and many denials based on these exclusions can be challenged and overturned.
Let’s be honest—life insurance companies exist to make money. There’s nothing inherently wrong with that, but it does mean they have a strong incentive to avoid paying claims whenever possible. To achieve that goal, insurers invest in entire departments of legal experts tasked with analyzing claims for potential policy violations. Among their most-used tools is the policy exclusion—fine print that outlines specific scenarios under which the insurer can avoid paying out. These exclusions are written in ways that sound reasonable but are frequently used in unreasonable ways.
One exclusion we encounter often in wrongful denial cases is the Criminal Activity Exclusion. While it may seem sensible in theory—why should an insurer pay out if someone dies while robbing a bank?—it is also one of the most abused. It’s not unusual for insurers to deny claims under this clause based on minor or uncharged infractions, or to stretch the exclusion to cover situations where the criminal conduct played no meaningful role in the insured’s death. One case we handled illustrates just how far insurers will go to justify a denial, even when their own policy language suggests otherwise.
Brian’s Story: A Denial Based on Gun Possession
Brian was a 63-year-old welder who had worked for the same construction company for more than three decades. As part of his employment benefits, he held a life insurance policy worth $250,000. Like many workers, Brian never read the full policy. He trusted that by keeping the policy active and naming his wife, Janice, as the sole beneficiary, she would be protected if anything happened to him.
Brian wasn’t a criminal. He was a family man who enjoyed fishing, hunting, and weekend camping trips. He also happened to be an avid gun collector—but he wasn’t overly concerned with paperwork. In his home state, concealed carry permits were required for certain weapons, but Brian didn’t think twice about storing a few of his handguns in his truck. He wasn’t planning to use them—he just liked having them with him, like many hunters and gun owners do.
Tragically, Brian was involved in a severe auto accident just days before his 64th birthday. He suffered traumatic head injuries and was airlifted to the nearest trauma hospital. Six days later, after extensive medical treatment, Brian passed away. During the accident investigation, law enforcement recovered three firearms from under the seat of Brian’s truck. While they noted that Brian did not have the proper permits for concealed carry, no criminal charges were filed—especially given that Brian had already passed away.
The Denial Janice Never Saw Coming
Grieving and overwhelmed, Janice submitted a life insurance claim, believing the policy would cover the funeral expenses and give her some financial stability. She submitted the required documents: the death certificate, police report, and accident investigation file. About a month later, she received a shocking denial letter. According to the insurer, Brian died while committing a crime—specifically, illegally possessing firearms without a permit. Because of this, the company invoked the Criminal Activity Exclusion and refused to pay the $250,000 benefit.
Janice couldn’t believe it. Her husband wasn’t a criminal. No charges were filed, and more importantly, the accident that killed him had nothing to do with the weapons. She reached out to friends and was eventually referred to an attorney who specialized in life insurance denials. After reviewing the denial letter and supporting documents, the attorney agreed to take on the case—but warned that it would not be an easy fight.
Building the Legal Case Against the Denial
The attorney’s argument centered on the actual wording of the exclusion. Brian’s policy stated that a claim could be denied if the insured died “while engaging in criminal activity.” The insurer had interpreted this phrase broadly, arguing that because Brian was in possession of unpermitted guns at the time of the accident, he was technically committing a crime.
But the attorney challenged that logic. First, he pointed out that Brian didn’t die at the scene—he passed away six days later in a hospital bed. Second, the alleged criminal activity (possessing unlicensed firearms) had no connection to the cause of death, which was blunt-force trauma from a car crash. Third, there was no evidence that Brian was even aware he was violating the law at the time. The attorney emphasized that applying the exclusion in such a sweeping manner would allow insurers to deny nearly any claim where a minor infraction was present, even if irrelevant to the insured’s death.
Finally, the attorney reminded the insurer’s internal review board that insurance exclusions must be interpreted narrowly and in the policyholder’s favor. Courts routinely reject denials that rely on vague or overly broad readings of policy language.
The Outcome: Justice for Janice
In the end, the insurer’s appeals board agreed. While they may have hoped Janice wouldn’t push back, the strength of the legal argument—and the clear misapplication of the policy’s language—forced them to reverse the denial. Janice received the full $250,000 death benefit. While it couldn’t bring Brian back, it gave her peace of mind and the resources to move forward.
What This Case Teaches Us About Denials and Exclusions
This story is far from unique. Every day, insurance companies deny legitimate claims using narrow interpretations of vague exclusions, betting that grieving beneficiaries won’t fight back. But these denials can be overturned. With the help of an experienced life insurance attorney, beneficiaries can contest unfair interpretations and hold insurers accountable.
Exclusions like the Criminal Activity Exclusion, Suicide Exclusion, or Misrepresentation Clause may sound intimidating, but they’re not always enforceable. Policyholders and their families deserve better than to be blindsided by legal technicalities—especially when they’ve paid premiums in good faith for years.
We Help People Fight Unfair Life Insurance Denials
If your life insurance claim was denied due to an alleged exclusion and the reasoning doesn’t sit right with you, contact us. We specialize in fighting wrongful denials and have an outstanding track record of success. We’ll provide a free consultation and give you an honest evaluation of your case. You don’t pay us unless we recover funds on your behalf. You owe it to your loved one—and yourself—not to accept a denial without a fight.