When life insurance doesn't pay out

lovemoney.com
Life ring
Life ring

It's a gloomy thought, but in what situation could your life insurance policy fail to pay out as expected?

Life insurance can help to limit the financial impact of your death for your loved ones.

But while it pays out a whopping 96% of the time, according to industry experts, what about that 4%? When does life insurance fail to pay out?