Insurance Marketplace, Inc Blog
When purchasing a life insurance policy, there are specific situations where the policy will not payout to the beneficiary. A life insurance policy is a contract that has fine print that you should read carefully before signing. You can't rely on life insurance for all your problems. Here are a number of instances when life insurance won't pay out its claims.
One of the common circumstances in which your life insurance policy will not pay out is when the insured committed suicide. Depending on your current situation, there is a particular time frame where suicide will prevent any payout. The insurance company will take their time in investigating whether the act of suicide is true.
Smoking or a Health-Related Issue
This is another case where the incontestability clause plays out again. If your past smoking habits and high blood pressure have caused your critical illness, then your insurer won't pay out your claims. Sometimes, you have high blood pressure, and you didn't mention this or your forgot to mention this before signing your policy. Later, your insurer may not pay out your claims for hypertension critical illness benefit. Also, if you have bad health habits like smoking and drinking, your insurer may refuse to pay out claims on any health condition caused by these habits.
Your insurer will not pay out claims on accidents caused by hazardous activities or sports. The list includes skydiving, rock climbing, paragliding, and other death-defying sports. If your insurer thinks that you’re not managing your risks well, then they won’t pay your claims. Manage life risks by not engaging in dangerous hobbies or lifestyle.
If one dies while doing something illegal or in the act of committing a crime, then no life insurance company will ever make a payment. Also, if you get killed while stealing something, there's no payment for your beneficiary. Also, in any case, that you will die from a heart attack while trespassing, your insurer will deny any life insurance claim in your favor.
Act of War
Life insurance policies may exclude an act of war. Thus, it cannot pay out claims involving deaths of soldiers during military service. It also can’t issue payouts for civilians killed in wars, including correspondents covering a news story.
Some Final Words
Your insurer will always investigate the cause of your death before they pay out your life insurance claims. Anything illegal or against the rules will result in a denial of claims. Thus, make sure that you read the fine print of your policy so that you'll know when your life insurance won't payout.
At Insurance Marketplace, Inc., we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (541) 779-0177. Get your free quote today by CLICKING HERE.