General Info

Your Life Insurance Plan: Reading the Fine Print

.  Life Insurance is a great way to protect your family in case the unimaginable happens. Many ask, “How much life insurance do I need?” but, that is not the only question you should be considering.  It’s extremely important to be aware that certain causes of death may affect your monetary pay out to your beneficiaries.  These issues are called Exclusions – simply put exclusions are events and conditions which are not covered by a typical insurance policy. A life insurance plan is a legal document and exclusions could prevent your beneficiaries from receiving the appropriate pay out. 

Let’s take a look at some common exclusions to typical life insurance plans:

Suicide

Policies can vary as to what the payout will be or if there will be a cash settlement in cases of suicide. Refer to your policy for the terms and conditions of suicide related deaths. According to the North Carolina Department of Insurance, most policies say that if the insured person commits suicide within two years of the policy start date, the death benefit would only include previously made premium payments.

Risky Behaviors

If you live life on the wild side, take note of this clause in your policy.  If a person dies from risky behaviors such as sky diving, rock climbing, extreme sports etc, there is a chance your beneficiary will not receive a payout from the policy. Some Life Insurance companies do offer special add-on clauses and higher premiums to people who admit they are more adventurous.

Aviation Accidents

If you pilot your own plane, pay special attention to this clause. In many policies, deaths from commercial flights will be covered, but deaths resulting from private planes may not be covered.

Sports

First, alert your agent to the fact that you play competitive sports.  Secondly, you may need to pay higher life insurance rates due to the  injuries that can result from certain sports. Finally, alert your agent if you participate in the auto racing industry as a hobby or as a professional.

Living outside of the United States

If you purchase your plan in North Carolina or another part of the United States and move to another country, check with your insurance company about any impact this move will have on your policy. Above all, it is important to notify your agent of big changes in your circumstances. Finally, an experienced agent can navigate you through this new circumstances in your life.

Health Problems you Didn’t Disclose

If you buy a life insurance policy and don’t reveal that you have certain health conditions, the life insurance company has the right to deny payment of benefits. Honesty is the best policy. Disclose any conditions—even simple ones like high blood pressure or high cholesterol.

Acts of War

Death from acts of war are excluded from many policies.

Fraud

Various types of fraud with the application and the claims can result in your beneficiaries not receiving your death benefit. 

The key is to purchase your plan from a trusted agent who can explain the terms and conditions of this important document. Whether you are shopping for term or whole life insurance, our goal at Carolina Insurance Professionals is to ensure your family is protected for years to come. In conclusion, Contact us today and our Life Insurance team member will help you sort through the coverage, premiums, and exclusions of Life Insurance Plans. We want you to find the best life insurance for your situation. Our team would love to supply you with life insurance quotes. 

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