Exclusions in Life Insurance: All You Need to Know

Life insurance is meant to give you peace of mind, a feeling of safety and security. However, there are many aspects of these policies that you may not know about unless you read the fine print carefully or enquire the insurer yourself. The exclusions are one of them.

What are exclusions in life insurance?

A life insurance policy guarantees financial aid or otherwise to the nominees in an event of the insured individual’s death. However, there are certain events that are not covered under the same which may vary from one insurance company to another. These are called “exclusions”.

The following are some of the most common exclusions that aren’t usually covered by life insurance policies:

Illegal Activities

If an insured person dies because of involvement in illegal or unlawful activities, then their insurance policy isn’t entertained. This is because the policy maintains that it’s the person participates in such activities, then they put themselves in a risky position of their own accord.

Man-Made Disasters

Most policies don’t give insurance for man-made disasters such as wars or riots. This is because, in such events, a large number of policyholders are affected at the same time.

Suicide

Suicide is not only illegal in India but it’s also an exclusion in life insurance policies. In many cases, when nominees file a claim, then a medical expert investigates the case to determine whether the cause of death was natural or otherwise. If it’s found that the cause is suicide, then the insurer may reject the claim. Interestingly, most group insurance policies also have a suicide exclusion clause.

Sexual Transmitted Diseases (STD)

In an individual passes away because of an STD such as HIV, then their claim can be rejected by the insurer.

Drug Abuse/Medicine Overdose

If a person dies by abusing medicine dosage or illegal drugs/solvent/etc. then their claim may not be accepted by the insurer.