Death is an inevitable part of life, but we try to protect our loved ones as best we can once we’re gone. If you have an existing policy or are in the process of acquiring one, you may be wondering, “can life insurance claims be denied?”
The vast majority (99%+) of life insurance claims are settled with minimal fuss for the grieving parties. However, there are some circumstances in which your policy might not pay out. This can be distressing for your loved ones during their time of grief and a source of stress for you. Avoid these mistakes to keep your policy valid.
Failure to disclose a medical condition
If you have a life insurance policy, you must keep your insurer up to date with any notable medical conditions or injuries you incur. It may seem like a hassle, but it is easily forgotten, and one of the main reasons life insurance claims are denied. Update your policy to reflect your changes as soon as possible to keep your life insurance policy from becoming void.
If you are worried that your medical circumstances will leave you unable to set up coverage, products such as no medical life insurance and guaranteed issue life insurance.
If you have an existing policy with us and need to update us on your circumstances, please get in touch.
Intent to deceive
It should go without saying, but if you misrepresent your health, lie about your circumstances, or omit important information, your policy may no longer be valid.
A typical health insurance application may ask for information in the following areas so be prepared with honest answers:
- Medical history. This includes current health conditions, mental health conditions, prescription history and family health history (parents and siblings).
- Risky hobbies. This includes activities like car racing, mountain climbing and skydiving.
- Risky behaviours. This includes tobacco use, criminal records and dangerous driving behaviours such as DUI convictions or other traffic violations.
- Dangerous occupations. Construction workers, active military personnel, firefighters, law enforcement and pilots can face higher life insurance rates.
SOURCE: Forbes
Failure to pay your policy
If you have a policy but have been unable to make payments, your coverage may be voided. If your loved ones are to claim successfully, your payments should be up to date. Most insurers have a grace period in which time claimants can make final payments if they were missed, but there cannot be an outstanding amount of several months unless an arrangement has been made to that effect.
If your payments have lapsed, you may be able to bring your account up to date to reinstate the policy, but this depends on the product and insurer your policy is with. You can expect to pay additional interest and have a time limit in which to pay it.
The last year has changed many people’s financial circumstances, so if you find yourself unable to pay, contact your insurance to see if a cheaper plan is a better option right now.
Suicide
The assisted suicide debate continues but for now, suicide within the first two years of taking out a policy is usually cause for your life insurance claim to be denied. This can differ depending on your policy and insurer. In the event of suicide, your insurer may refund your life insurance premiums paid thus far to your loved ones.
Outliving your term life insurance policy
Finally, you may have set up coverage under a term life insurance policy. Term life insurance can be set for as little as 5 or as many as 30 years. It is often used to cover mortgage costs in the event of the main income earner of the household passing away.
Once your term has ended, your life insurance policy is void, so it is essential to get in touch to organise additional cover for the future. You can:
- Extend the term
- Convert your policy to permanent life insurance
It Only Takes a Call
If you are looking to take out a new life insurance policy or would like to talk to our team about your options, you can request a free quote online or contact us directly.
Blue Country Insurance – all your protection under one roof… because your health and life matters.
