Life insurance is a useful tool to help ease the financial burden for your loved ones in the case of your death. While many kinds of deaths are covered by life insurance policies, some are not. The exact coverage offered will depend on the life insurance company that you decide to purchase through, but generally, there are a few universal exclusions to keep an eye out for.
Life Insurance Won’t Cover Lying on Your Application
One of the easiest ways to have life insurance policy coverage revoked is by lying on your application. Lying, in any capacity, can seriously affect beneficiary payouts. It’s best to always be honest and thorough when taking out a life insurance policy, but here are a few things that could definitely get you in trouble.
Examples: Lying about your health, including any medical conditions and illicit substance use, lying about family health, or lying about your occupation and increased risk activities.
Life Insurance May Not Cover Your Career
Unfortunately, some career niches are excluded from basic life insurance plans. Life insurance if a business in the end.
The life insurance companies do not want to have to delve out any more money than necessary or prematurely. Because of this, they can place harsh restrictions on career choices that appear inherently riskier.
Examples: Fishermen, miners, pilots, oil rig workers, loggers, heavy machine operators, and other offshore or equipment-dependent positions.
Life Insurance Won’t Cover Some Risky Activities
Sure, you can, for the most part, go about your normal life, and your life insurance policy will cover you. But there are a few instances where your recreational choices can impact your coverage.
Examples: Common activities not covered include scuba diving, rock, or mountain climbing, hang gliding, racing, and even scuba diving. Many of these risky activities are something that families do on vacation, be sure to verify your life insurance’s risky activity clause to be sure you’re covered.
Life Insurance Won’t Cover Certain Murders
Generally, murders are covered under life insurance policies, but with a certain caveat. The murderer cannot in any way be connected to the victim or their life insurance policy as a beneficiary.
If it is discovered that someone related to the beneficiary or the beneficiary themselves was connected to the murder, they will not receive the death benefit. In some cases, the life insurance company may instead pay the benefit to other beneficiaries or your estate.
Life Insurance May Not Cover Suicide
Your life insurance company will usually cover your suicide so long as it is after the first two years of owning the policy. If before that two-year marker, the company may not pay the benefit as a suicide clause limits the chance of someone committing suicide intentionally, simply to aid their beneficiaries.
What to Do for Coverage
If an increased risk in your life is resulting in apprehension to purchase a life insurance policy, there are still options out there. Generally, someone who partakes in an activity or has a condition that most life insurance policies won’t cover can opt for a policy specifically designed to cover that increased risk.
However, premiums on these policies will be much higher, which can make them hard to afford. You will need to shop around for different rates in order to find the one that works best for you.