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common term life insurance exclusions
The good news is that term life insurance has become somewhat of a commodity
these days which means the plans, options, and most importantly...exclusions and
limitations are pretty similar for the most part.
Put another way, you can feel comfortable that a carrier or plan you find
through our quoting engine will not have significant holes in coverage or
uncommon exclusions that are far outside the norm of what a standard
term life insurance plan should be.
Let's take a look at some common exclusions and limitations that can be found
throughout the term life insurance market.
You can always quote the common plans with exclusions here:
Most of the core exclusions have to do with certain actions on behalf of the
applicant that would essentially negate the life carrier's contractual
obligation to pay.
Let's take a look at these.
Common exclusions in life insurance policies
War Exclusion
This exclusion is pretty self-explanatory and also pretty obvious as why it
is needed.
Usually used in times of war, this exclusion excludes payment during times of
war.
There may be life insurance policies available on a group basis or through
the government for active duty personnel.
Suicide Clause
This is a common clause that excludes payment of benefits if suicide occurs
in the first two years of the policy.
Aviation Clause
This clause would exclude payment during an aviation accident outside of one
that occurs on a standard airline scheduled flight (i.e. the passenger on one of
the major carriers.
This falls under the umbrella of
hazardous activities, occupations, and activities and is primarily geared
towards pilots.
Hazardous Activities
Continuing with the hazardous activities, occupations, and hobbies theme,
some additional exclusions may apply to activities such as scuba diving, hang
gliding, sky diving, and auto/motorcycle racing.
It's important if you engage in these activities to a) make sure to
accurately list them on the application/paramedical exam and b) understand
whether the policy you have selected completely excludes payment due to death
resulting from these underlying activities or charges an additional
life insurance premium in order to cover them.
Different carriers and plans will address these usually in one of these two
ways but it's important to understand up front how your policy will address
these issues.
Contestability Clause
Another common policy limitation is the contestability clause.
If a carrier finds that there was misrepresentation during the
term life insurance underwriting process (usually application/paramedical
exam) within the first two years of the policy, the carrier can contest the
contract and potentially not pay the benefits.
One more time, this is a key reason to accurately answer all questions during
the application process.
We strongly recommend to avoid any misrepresentation to the carrier.
It makes no sense to falsely qualify for life insurance only to have it not
pay out when you most need it.
Let us know if you are concerned about qualifying for coverage and we'll try
to provide some guidance, and if need be, some
high risk life insurance options as an alternative.
Each carrier will have their little tweaks and twists but we deal with strong
carriers for the very reason that we do not want the risk of major exclusions
for our clients that are contrary to the norm in the market.
You should be able to compare based on carrier rating and premium with
confidence in your decision.
With 25+ years experience, we can quickly find the best life insurance value
for you.
Again, there is absolutely no cost to you for our services. Call
800-710-0455 Today!