Even though life insurance is meant to cover a wide range of situations and events, it usually doesn’t cover a lot of things. In this case, it’s likely that any claims for benefits or payments will be denied or turned down. It’s important to know these things before you take out a policy.
Life insurance policies usually have two kinds of exclusions: general exclusions and specific exclusions. If you look at life insurance policies from different companies, you’ll see that each has its own rules and definitions for these exclusions. Even though they are different, the following are some common life insurance exclusions that are used today.
I can hear you all saying right now, but Billy, what does this actually mean? All I want to know is what is the best life insurance policy for our needs. Yes, we know that. However if you want to compare life cover and find out which life insurance policy is best in Australia for your needs, then we’re here to help. Read on.
General Exclusions
General exclusions are the kinds of exclusions that most life insurance plans have. These are the exclusions that come with the policies by default, no matter what the applicant’s lifestyle, health history, or other circumstances are.
Does Life Insurance Pay For Suicidal Death In Australia (or Self Harm)
A major life insurance question many people have is does life insurance pay for suicidal death in Australia? If not all, life insurance plans have a clause called a suicide and self-harm clause. This clause says that if a suicide or attempt to commit suicide happens in the first 13 months of the policy, the insurance company will not pay out any benefits.
Most insurers keep this suicide clause in place for one to two years after the policy starts or is brought back into force (the vast majority insurers only hold this clause for 13 months, but others hold it for as long as two years). This means that there will be no death benefit if the suicide happens during this time frame. Once this set amount of time has passed, the clause will either be dropped or re-evaluated, depending on the rules and policies of the insurer.
When a person commits suicide during the exclusion period, some insurers decide to return any premiums paid instead of paying the death benefits.
Aside from suicide, most life insurance plans do not cover injuries, illnesses, or disabilities that are caused by the person themselves.
These clauses are meant to stop people from applying for life insurance and then hurting themselves just to get money for themselves or their families.
Criminal Activity
This is about any injuries or deaths caused by things that are against the law. It includes any illness or injury directly caused by an illegal act or caused by taking part in an illegal act.
Recklessness and Negligence
This exclusion is about injuries and deaths caused by a person’s own carelessness or negligence. Each insurance company will have its own way of defining this clause and its exclusions. Most of the time, this exclusion has to do with things and actions that a normal, reasonable person would not do.
Specific Exclusions
These are the things that insurers leave out of their policies based on the situation of the person who wants to buy it. Exclusions and limits will depend on the applicant’s medical history, lifestyle, and other important factors that can affect the applicant’s risk level. These exceptions will, of course, be different for each applicant.
Dangerous Jobs
Based on the risks of the applicant’s job, these are the things that aren’t covered and what can’t be covered. This usually applies to people whose jobs are dangerous, like underground mining, construction, farming, and forestry.
Risky Hobbies
People with high-risk hobbies and activities may find that some parts of their insurance policies don’t cover them. Most of the time, this is about people who do things like skydiving, mountain climbing, and bungee jumping.
Occupational Hazards
This rule doesn’t apply to any injuries or deaths that are considered to be work-related risks. It includes things like fisherman drowning or taxi drivers getting hurt in car accidents.
Life Insurance With Pre-existing Conditions Australia
Even though it doesn’t happen very often, if you have a medical condition that lasts a long time or an illness that could come back, your plan may not cover it. Some insurance companies have stricter rules than others about this, so check your policy if this is important to you. Life-insurance with pre-existing conditions should always be checked.
Are These Exclusions The Same In My Super Life Cover?
This is a really good question, as the only question we really get asked is life insurance through super tax deductible! Yes, normally the same exclusions will apply to any life insurance policies held within your superannuation. This is why it’s important to compare life cover and get the best life insurance policy for your needs.
Can You Have Multiple Life Insurance Policies In Australia?
You may think if you have multiple life insurance policies, then if you have double cover on a specific item it might be excluded. That’s not the case. It is legal to have multiple life insurance cover in Australia and the general exclusions will be different in each policy, as they will more than likely be with different providers.
Understand The Policy Before You Make A Commitment
No matter what kind of life insurance you get, you should always read the policies and make sure you understand them before you sign up. If you need someone else to read through it for you and to explain it in layman terms, then ask them to.
Compare Life Cover
So we’ve answered the a couple of specific questions regarding common exclusions in life insurance including does life insurance pay for suicidal death in Australia and can you have multiple life insurance policies in Australia. Now we get to compare life cover and get the best life insurance policy for your needs from our panel of providers! To get started, just click here.
Also, a great way to get your total insurance needs covered is through Billy Explores. Don’t forget you can also do private health insurance comparison through Billy Explores too! Get the lowdown of the differences between Medicare and Private Health Insurance, and how to do a health insurance comparison. After all, we all have insurance for the same reason – to provide security for you and your family.
