Can a life insurance company cancel a policy after death? Yes—and here’s how to fight back.
Life insurance is supposed to be simple: you pay your premiums, and your loved ones receive a payout when you die. But in practice, it’s not always that straightforward. Denials are common—and in many cases, life insurance companies don’t just deny a claim, they go a step further and retroactively cancel the entire policy. If your claim was denied or the policy was posthumously voided, you are not out of options. Many of these decisions can be overturned.
Why do insurers cancel life insurance policies after death?
One of the most frustrating realities about life insurance is that the insurer may still “investigate” even after years of paid premiums. Most policies contain a contestability clause, which allows the insurance company to review the application and medical history if the policyholder dies within the first two years of coverage. This opens the door for the insurer to look for any inconsistency, no matter how small, to justify a denial or cancellation.
Common justifications used during the contestability period include:
Failing to disclose a past medical condition
Forgetting to report a prescription drug
Understating alcohol or tobacco use
Engaging in hazardous hobbies without disclosure
If the insurer finds something they believe is a material misrepresentation, they may attempt to void the policy from its inception—meaning they’ll claim it was never valid in the first place. But the truth is, not all “misrepresentations” are legally sufficient to cancel a policy. Many denials are based on misinterpretations or bad faith actions.
Legitimate vs. wrongful policy cancellations
It’s important to distinguish between valid cancellations and those that may be challenged in court. Insurance companies have the right to void policies under certain conditions, but they often abuse this power.
Legitimate cancellations may occur when:
Premiums are not paid and the grace period expires. Many families are shocked to learn the policy lapsed due to a missed payment, especially if the policyholder was ill or incapacitated.
Intentional fraud occurred during the application. If a terminally ill person knowingly lies about their condition, the insurer can void the policy if the death occurs within the contestability window.
The cause of death is explicitly excluded. For example, some policies exclude death due to illegal drug use, acts of war, or suicide within the first two years.
Even in these situations, the burden is on the insurer to prove the cancellation is valid. Courts have ruled against insurers who fail to act within the contestability period or who interpret vague exclusions unfairly.
Insurers can’t cancel your policy for just any reason
Some beneficiaries are led to believe that policies can be canceled for all sorts of reasons. That’s not true. Insurers cannot legally cancel a policy just because:
The policyholder moved to a different state or country
The policyholder developed a serious illness after purchasing coverage
They picked up an unhealthy habit like smoking after policy issuance
They bought additional life insurance from another company
These actions are not considered misrepresentations and cannot void a policy. Any denial based on these grounds is likely a violation of the contract and may be overturned.
Missed premium? Here’s what you can do.
The most common reason for an unintentional policy lapse is nonpayment. But even if a premium is missed, you may still be able to save the policy—or recover the death benefit.
Insurers are required to provide:
Grace periods (typically 30–60 days)
Mailed notices of nonpayment
Opportunity for reinstatement in many cases
Some states even require insurers to make reasonable efforts to contact the policyholder—or their designated secondary contact—before canceling coverage. If these steps were skipped or poorly executed, the cancellation may not hold up in court.
To prevent these issues, consider:
Setting up auto-pay or calendar reminders
Naming a secondary contact who will be alerted in case of missed payments
Giving a trusted friend or relative access to help with finances in emergencies
How to challenge a policy cancellation or denial
If your claim was denied and the insurer has voided the policy, don’t assume it’s over. Insurance companies are businesses, and denying large claims protects their bottom line. Many cancellations are made hastily or in bad faith, assuming the family won’t push back.
You may have grounds to fight the decision if:
The contestability period expired before the denial was issued
The alleged misrepresentation was not material to the cause of death
The insurer failed to act within legal deadlines
Premium notices weren’t properly sent or received
The death was wrongly classified under an excluded category
Our law firm has helped countless families recover wrongfully denied or canceled life insurance benefits. We understand the legal intricacies of policy rescission, contestability, and exclusions—and we don’t get paid unless you win.
What to do next if your life insurance claim is denied or canceled
Whether the policy lapsed, was rescinded due to “fraud,” or was canceled after a contested cause of death, it’s essential to get legal advice right away. Time limits may apply for appeals or lawsuits. The sooner you act, the better your chances of recovery.
We offer free consultations and only charge a fee if we recover money for you. If your loved one worked hard to secure a policy meant to protect your future, don’t let a cancellation or denial erase that protection.
FAQ: Life Insurance Claim Denials and Cancellations
Can a life insurance company cancel a policy after death?
Yes, especially during the contestability period. However, any cancellation must be legally justified and supported by solid evidence.
What is a “material misrepresentation”?
It’s a false statement on the application that would have changed the insurer’s decision to issue the policy or set the premiums. Not every omission counts.
What happens if a premium was missed before death?
If the grace period hasn’t expired, the policy may still be active. If cancellation notices weren’t properly delivered, the lapse may not be enforceable.
Are all causes of death covered?
No. Policies may exclude certain causes, such as suicide (within two years), illegal drug use, or deaths during certain hazardous activities.
Can I fight a cancellation due to contestability?
Yes. Many denials during the contestability period are successfully challenged—especially if the alleged misrepresentation wasn’t related to the death.