What Are Life Insurance Policy Exclusions?
What To Know Upfront About Life Insurance Exclusions
Understanding your life insurance policy is essential. As with all other types of insurance, there are exclusions, limits and requirements to the policy, benefits and payouts. These exclusions and provisions control how an insured can use the life insurance policy.
It is best to know every aspect of the life insurance policy before purchasing or signing any documents. Make sure to understand the policy exclusions and how they may apply to you, your family and your personal situation.
Provisions, Exclusions And Requirements Of Life Insurance Policies
There are many provisions in a life insurance policy, including what is called an ownership clause. There is also a grace period before benefits can be paid out, a reinstatement clause and also change of a plan provision.
Also, there are other standard exclusions to most life insurance policies. Let’s discuss these. The suicide provision states that the insurance company will not pay benefits if the policyholder commits suicide within a certain period of time of purchasing the policy. Most insurance companies will only reimburse the premiums paid.
The dangerous activity clause is if a policyholder dies while engaging in a certain activities. These include but are not limited to auto racing, rock-climbing, and hand gliding.
Also, if a policyholder is engaging in active participation in a war, war-like activity and terrorists activity. This will also include a “gross negligence and deliberate exposure to exceptional danger exclusion. This does not include if a policyholder dies while attempting to save someone’s life.
One thing to also consider an exclusion is a pre-existing medical condition. This simply means a medical condition or related medical condition that required treatment, medication or medical doctor care, prior to the purchase of the life insurance policy. Also, no benefit will be paid if a disability is caused by the pre-existing condition unless that medical condition was disclosed at the time of purchasing.
There may be other exclusions not listed, so make sure you read through your life insurance policy.