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At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation of how we make money. Our content is backed by LLC, a licensed entity (NPN: 19966249). For more information, please see our Insurance Disclosure. Bankrate logo The Bankrate promise
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Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. As you get older, having a life insurance policy has a number of benefits. If you have the right policy, it can replace your income during retirement or help you pay off debt. Most importantly, it allows you to leave money to your loved ones after you pass away in the form of a death benefit. To compare life insurance quotes, enter your details below to see which provider is best for you. This advertising widget is powered by HomeInsurance.com, a licensed insurance producer (NPN: 8781838) and a corporate affiliate of Bankrate. The offers and clickable links that appear on this advertisement are from companies that compensate Homeinsurance.com LLC in different ways. The compensation received and other factors, such as your location, may impact what ads and links appear, and how, where, and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available to you as a consumer. We strive to keep our information accurate and up-to-date, but some information may not be current. Your actual offer terms from an advertiser may be different than the offer terms on this widget. All offers may be subject to additional terms and conditions of the advertiser. Compare life insurance providers quickly and easily
See which provider is right for you. The amount of coverage you need depends on many factors, including your age, income, mortgage and other debts and anticipated funeral expenses. Whole life insurance combines life insurance with an investment component. Coverage for life Tax-deferred savings benefit if premiums are paid 3 variations of permanent insurance: whole life, universal life and variable life include investment component Term life insurance is precisely what the name implies: an insurance policy that is good for a specific term of time. Fixed premium over term No savings benefits Outliving policy or policy cancellation results in no money back Find matches Powered by HomeInsurance.com (NPN: 8781838) This advertising widget is powered by HomeInsurance.com, a licensed insurance producer (NPN: 8781838) and a corporate affiliate of Bankrate. HomeInsurance.com LLC services are only available in states where it is licensed and insurance coverage through HomeInsurance.com may not be available in all states. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. Bankrate Why Lemonade? It's a fresh twist on life insurance: easy, accessible and affordable. See more providers in Choose from insurers in Show More However, not everyone knows that there are certain exclusions that can prevent your beneficiaries from claiming your death benefit. If you have a , it’s important to know what those exclusions are so you and your family can avoid any surprises following the death of the insured. What are the typical exclusions in a life insurance policy
A life insurance exclusion is a situation or circumstance that prevents your beneficiaries from receiving your . Essentially, it means that certain causes of death are not covered by the policy. Life insurance exclusions are regulated at the state level, but insurance companies can decide which of those exclusions they include in their policies. The main reason why include exclusions is to protect them from risk—namely, early and untimely deaths. When a policyholder passes away, the insurance company can lose money when paying the death benefit. Including exclusions is a way to reduce the likelihood of paying a death benefit in certain situations. What are the typical exclusions in a life insurance policy
You probably know that life insurance covers most causes of death, including old age, terminal illness and so on. However, you might be surprised to learn what situations are not covered by insurance: : If the policyholder commits suicide within two years of purchasing their policy, the insured’s beneficiaries are not eligible for death benefits. Illegal activity: When someone dies as a result of illegal activity, their beneficiaries cannot claim their death benefits. This includes everything from drug deals gone wrong to DUI crashes. Risky activity: Any death due to risky activities, such as skydiving or rock climbing, are usually counted as an exclusion. Substance abuse: If a policyholder’s death is the result of drug or alcohol abuse, it’s excluded from their policy. Misrepresentation: If you are found to have lied about your age, or provided any false information to your life insurance company, it could completely void your coverage and no death benefits will be paid. The life insurance suicide clause
James Miles, consulting staff fellow for the Society of Actuaries, says virtually every life insurer typically includes the same outright exclusion in its policy: a suicide clause. “Depending on the state, it’s usually a two-year suicide clause. If you commit suicide within the first two years of the contract, the beneficiary would receive the premiums back but not the death benefit,” he says. The suicide clause is in place to prevent individuals from purchasing a life insurance policy when they are struggling with mental health disorders or are planning suicide. Most life insurance companies screen applicants for mental health conditions, like depression and anxiety, before they are approved for coverage. And while you will likely pay a higher premium if you are living with a mental health condition, you will still most likely be able to get a life insurance policy. In the case of physician-assisted suicide, the same rule applies. If you live in a state where assisted suicide is legal, you must pass the two-year period before you can claim death benefits. A changing definition of risk
Over the years, life insurance companies have altered their definition of risky behavior based on global and economic changes. For instance, life insurance companies used to exclude private aviation from the list of covered causes of death. But as private aircrafts became safer, life insurance companies eased up on the rules. Today, most life insurance companies offer an aviation rider for people who are recreational pilots. “Flying in a plane today is certainly much, much safer than it was 30 years ago because of navigational equipment, plane construction, pilot training, weather radar, all of that,” Miles says. “Now the exclusion is there for a pilot with very little experience or a very old private pilot, somebody in their 90s, who is flying a plane. A private pilot who is middle-aged and experienced is not going to have trouble getting life insurance.” Until several decades ago, acts of war and serving in the military were usually excluded from life insurance policies. But these exclusions began to disappear following the Vietnam War. Over time, the notion of war has changed, as well as support for service members. Chris Graham, chief life insurance underwriter for The Hartford, says, “You don’t have the catastrophic risks you had in the first or second World War,” he says. “And the military is viewed differently today. I think there is a sense of patriotism in some of that thinking.” In the early 1980s, HIV was excluded from life insurance policies. That criteria has changed dramatically. According to Miles, “Today, HIV status would be looked at like other chronic illnesses a person might have. They might pay more for their life insurance, but they wouldn’t be totally excluded from getting coverage.” Frequently asked questions
Do life insurance exclusions impact my cost
If you choose to remove certain exclusions from your policy, it will . But if you agree to the exclusions when you sign a policy, it won’t have any effect on your rate. Can I get coverage if I have high-risk hobbies
Just because risky activities are excluded from most life insurance policies, doesn’t mean you can’t get coverage. For example, some insurance companies offer an endorsement or rider that extends your coverage to include activities like rock climbing or mountaineering. It will raise your premium, but your beneficiaries will still be eligible for the death benefit if something happens. Where can I find the exclusions in my life insurance policy
Life insurance exclusions are typically included in the “fine print” section of your policy documents. Before you purchase life insurance, you should ask your agent to review all policy exclusions with you. If you have any questions about what’s covered, it’s best to contact your agent who can walk you through the details of your policy. SHARE: Elizabeth Rivelli is a contributing insurance writer for Bankrate and has years of experience writing for insurance domains such as The Simple Dollar, Coverage.com and NextAdvisor, among others Morgan Chelsea Lanier has been an insurance editor for Bankrate since 2020. Using her eight years of experience in market research and data analysis, she works hard to understand her readers’ needs and bring data insights that provide accurate and straightforward answers to insurance questions. She firmly believes that all data tells a story – and she wants to bring that story to her readers. Mark Friedlander is director of corporate communications at III, a nonprofit organization focused on providing consumers with a better understanding of insurance. Related Articles