Can a Life Insurance Claim Be Denied Due to Missed Premium Payments?
Yes—life insurance companies often deny claims when they believe a policy has lapsed due to nonpayment of premiums. However, not all lapses are legitimate. In some cases, the insurance company may be responsible for the lapse, especially if notices of nonpayment were never delivered due to address errors or internal processing mistakes. When that happens, a denied claim may still be recoverable—if you have the right legal help.
Life Insurance Lapse Doesn’t Always Mean the End of the Claim
When a policyholder fails to pay premiums, insurance companies are typically allowed to cancel the policy after sending proper notice. But what if the notice was sent to the wrong address? What if the insurer failed to process a change-of-address form properly? These are the kinds of questions that matter in life insurance lapse disputes. Often, beneficiaries are unaware of what went wrong until a claim is unexpectedly denied.
A Real-World Example: How a Simple Error Nearly Cost a Family Everything
The case involved a 90-year-old woman named Agnes who had paid into her life insurance policy for over 30 years. Although she had no spouse or children, Agnes adored her niece Vicki and consistently reminded her that she would one day receive the policy benefit. Her decision to maintain that policy wasn’t out of financial necessity—it was an act of love.
About eight months before her death, Agnes moved into a nursing home due to declining health. A social worker helped her update her mailing address with essential contacts, including the life insurance company. Unfortunately, the insurance company recorded the address incorrectly. Instead of entering Toledo, Oregon—the correct city—they listed Toledo, Ohio.
What Went Wrong: A Chain Reaction from One Mistyped Address
When Agnes fell into a coma and could no longer manage her finances, her policy premiums went unpaid. As required by law, the insurer sent notices of nonpayment to the address they had on file. But because that address was wrong, the notices were never delivered. No one at the nursing home received them, and there was no opportunity to correct the issue before the policy was cancelled.
After Agnes passed, Vicki submitted a claim on her aunt’s life insurance policy—only to be stunned by a claim denial letter. The insurance company claimed the policy had lapsed due to nonpayment and that proper notice had been sent to the insured.
Why Beneficiaries Are Often Left in the Dark
In many denied lapse cases, the beneficiaries are caught off guard. They may have had little insight into the policyholder’s recent financial activity, and they’re often unaware of any address changes, missed premiums, or administrative errors. This leaves them vulnerable to vague or one-sided explanations from insurers. That’s why it’s essential to seek legal guidance right away.
How a Life Insurance Lawyer Can Help Uncover the Truth
Fortunately, Vicki chose not to give up. She contacted an attorney specializing in denied life insurance claims, and he quickly discovered what the insurance company missed—or perhaps ignored. He determined:
The address change notice was received by the insurer months before the lapse
The address was entered incorrectly into the company’s system
All notices of nonpayment were sent to the wrong city
Agnes had a long history of reliable premium payments
The attorney emphasized that Agnes had shown every intention of maintaining her policy, and that the lapse only occurred after she was incapacitated—through no fault of her own.
The Result: A Reversal of the Denial and Full Policy Payout
Faced with the facts—and the potential reputational damage of denying a 30-year policy on a technicality—the insurance company reversed its decision. Within a few weeks, Vicki received the full death benefit her aunt intended for her.
This case illustrates why you should never accept a denial letter at face value. Even when the insurer claims a policy lapsed, there may be a path forward—especially when that lapse happened under questionable circumstances.
Red Flags That May Indicate an Unlawful Policy Lapse
If you’re a beneficiary and a claim has been denied for nonpayment, consider the following:
Was the policyholder known to be responsible and financially stable?
Did the insured notify the company of a change of address or contact information?
Was the insured incapacitated or hospitalized in the months before the lapse?
Were premium notices or cancellation warnings misdirected or never received?
Was the lapse recent—just months before the death?
Any of these issues could point to a wrongful lapse or administrative error. If the insurance company is at fault, you may still be able to collect the full benefit.
Why You Shouldn't Try to Handle These Cases Alone
Life insurance disputes are complicated. The insurer has legal teams trained to defend denials, and they often hope that grieving families will simply accept the outcome. But a denied claim doesn’t have to be the final word.
Our law firm focuses exclusively on overturning wrongful life insurance denials. We understand the common tactics insurers use, and we know how to prove when a lapse was caused by the insurer—not the policyholder.
Get the Help You Deserve—Call Our Life Insurance Attorneys Today
If your loved one’s life insurance claim was denied due to a lapse or missed premium, don’t walk away without speaking to us first. You may still be entitled to the full payout. We offer free consultations, and you won’t pay anything unless we recover for you.
We’ve helped families across the country recover what they were promised—and we’re ready to help you too.