Making Life Insurance Claims
This article was last updated:
A straightforward overview of how long life insurance takes to pay out, the reasons claims are sometimes rejected, and industry statistics on pay out rates.
This article was last updated:
A straightforward overview of how long life insurance takes to pay out, the reasons claims are sometimes rejected, and industry statistics on pay out rates.
In this guide:
It depends on the insurance company, but most life insurance policies in the UK pay out within 30 days of the policyholder's death.
Yes, there are several reasons why an insurance company may refuse to pay out on a claim. The most common reason is that the policyholder has failed to pay premiums. Other reasons include suicide, misrepresentation on the application, and exclusion of pre-existing conditions.
The majority of life insurance policies in the UK do pay out. In fact, according to statistics from the Association of British Insurers, 98% of claims were paid in 2021.
Life insurance pay out rates for the different types of insurance were as follows:
However, there are some that do not, typically because the policyholder has failed to pay premiums, or failed to disclose something important when they arranged the policy.
Check out our review articles to see life insurance claim pay out rates for big-name life insurance companies including:
According to ABI data, only 2.9% of UK life insurance claims were rejected in 2021.
There are several reasons why an insurance company may refuse to pay out on a claim. The most common reason is that the policyholder has failed to pay premiums. Other reasons include suicide, misrepresentation on the application, and exclusion of pre-existing conditions.
Most life insurance policies in the UK exclude death by suicide from cover, if the death occurs within 2 years of the policy being taken out.
Policies often include a "suicide clause" giving the insurer a legal right to investigate before paying out if the death seems suspicious. For example, they might delay paying the claim if the death appeared to be caused by drugs found in the system or heavy consumption of alcohol.
Most life insurance policies can be cancelled at any time by the policyholder. However, this would likely result in the loss of cover.
Life insurance companies, meanwhile, can cancel your policies for several reasons. The most common reason is if you fail to pay your premiums. Other reasons include if they discover that you have lied or failed to disclose important information on your application.
Life insurance can be a tax deductible business expense in certain cases. For example, if the life insurance policy is taken out on a key employee, the premiums can be deducted as a business expense. Additionally, if the life insurance policy is used as collateral for a business loan, the
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