Understanding the Exclusions and Limitations of A Life Insurance Policy

Insurance is a provision you make against certain risks. And when such eventuality happens, the natural thing to do is to lodge a claim.

This is a vital aspect of your insurance contract. And at Heirs Life Assurance, we pride ourselves in paying claims within 24 hours once your documentations are complete and submitted as required.

However, there are two reasons why an insurance company may deny the payment of claims:

1. during a case of fraud
2. clear exclusion conditions stipulated in the terms of your insurance contract.

While fraud can be easily identified, this article explains the limitations and exclusions of a life insurance policy to better inform our audience.

Typical exclusions in life insurance include:

1. Suicide: Many life insurance policies exclude suicide from coverage. Taking your own life so your beneficiaries can get the death benefit is unfair to the insurance company (and to your loved ones) and not covered in our policy. Insurance should account for sudden, unprecedented events; not what you cause by yourself.
2. Pre-existing medical conditions: Most life insurance policies do not cover pre-existing medical conditions. This is why they often sponsor proper medical checks before they sign an agreement with customers depending on the nature of the policy.
3. Dangerous activities: Participating in dangerous activities such as skydiving or bungee jumping is a conscious effort to risk your life and not covered in many policies.
4. War: We also exclude coverage for deaths that result from war or military service.
5. Illegal activity: All conscious effort to put your life at risk through drug use or criminal activities are excluded from our cover.

Ultimately, all the above aligns with one of the core tenets of insurance: Uberrimae fidei. This means insurance agreements are signed in the utmost good faith where both parties come clean to each other.

Companies are not out to defraud customers, nor should customers take insurance with the goal to defraud companies.

It is important to carefully review the exclusions and limitations of a life insurance policy when purchasing it. This information is usually outlined in the policy’s terms and conditions, and you can always contact the company or the insurance agent for clarification.

Article originally published with Heirs Life Assurance. Need further information? Send an email to: financifyme@gmail.com

Author: Theophilus Adeyinka

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