Every type of insurance company can deny insurance payouts if the rules or terms put forth in your contract are violated. This includes everyone from auto insurance to home insurance to a life insurance policy. While some of these mistakes can be intentional, others may be unintentional. Here are three mistakes that can cost you your life insurance payout.

1. Committing a Crime

According to Bankrate, life insurance policies will typically deny a payout if the insured party died while committing a felony. They also will deny coverage if the policyholder was killed by the beneficiary, under a term called the slayer rule. As such, one of the common reasons why a life insurance policy may not be paid out is because someone was committing a crime, and that led to their own death.

2. Providing Incorrect Medical Information

Another common reason why your life insurance payout can be denied is that you provided incorrect medical information when you applied for the life insurance policy. When you apply for a life insurance policy, you can expect to answer many questions pertaining to your health. It's important to give honest and accurate information. If it's later found that you didn't provide the correct information on your application, either intentionally or unintentionally, your beneficiaries may not receive your life insurance payout.

3. Not Paying the Premiums

The final mistake that can cost you your life insurance payout is not paying the premium. You have to pay the premium for your life insurance policy when it's due. Think of life insurance like auto insurance. If you fail to pay your premium to an auto insurance company, your car will no longer be covered. The same is true with life insurance. If you don't pay the premium, your policy can be canceled or may not pay out if you pass away.

Your auto insurance company, life insurance company, or home insurance company can deny you a payout if you are doing something that violates their terms. As such, it's important to know what can violate a policy and prevent you from receiving a payout. Always read through your insurance contract to learn more about what may lead to a payout being denied so you can avoid making those mistakes. Contact Columbus Insurance Services Inc for your insurance needs. Our experts would be happy to help.