Are Life Insurance Policies the Same? No!
We see a lot of people with policies they bought online themselves. The website seemed good, said all the right things – everything seemed fine.
These people are usually less than impressed (read: angry!) to learn what’s NOT covered by their Life Insurance policy.
If you’re not familiar with the fine print of your policy, it’s probably time to dig out the paperwork.
Yeah, I know, no one has time for that stuff.
That’s why it pays to get someone else to check the fine print for you.
Here’s our quick guide to the small print on Life Insurance policies – should you like to do the grunt work yourself:
Some exclusions are pretty standard across life insurance policies.
One of these exclusions is a suicide clause.
The insurer won’t pay – for a defined period – if the cause of death was self-inflicted.
Although most policies have this clause, the defined period (from the start date of your policy) ranges from 13 months to 36 months depending on your policy – that’s a HUGE difference!
Here are some examples of exclusions from life insurance policies we’ve combed through for clients:
- Your involvement in an unlawful act, E.g. dying in a car accident where the overtaking speed exceeded the speed limit “may not be covered”.
- Travel to a country which the New Zealand Government has advised against. If you’re unsure, check it off with your insurer before you head overseas.
- HIV (Human Immunodeficiency Virus) or AIDS (Acquired Immunodeficiency Syndrome).
- Working with explosives, weapons, heights above 20 metres, depths below 30 metres or speeds above 130km per hour.
- War or any act thereof, invasion, acts of foreign enemies, civil war, civil unrest, rebellion, revolution insurrection assuming the proportions of or amounting to an uprising, military or usurped power, riot or civil commotion.
This is a clause we often see in policies purchased through a bank. Although it seems fairly innocuous at first glance, it could exclude a claim if death was caused in a protest situation whether or not the insured was participating.
- The Insured Person being addicted to or under the influence of alcohol, narcotics, or non-prescribed drugs or prescribed drugs if not taken as prescribed by a registered Medical Practitioner.
You need to be particularly wary of this kind of clause if you’ve EVER received medical assistance or counselling for the use of drugs or alcohol, even if it was a long time ago.
Exclusions provide wiggle-room when it comes to paying a claim!
After reading this, you might be concerned about exclusions on your policy.
Or, you can’t be bothered to read through your policy document and just wish someone else would do it for you.
Either way, give us a call.
We’ll take a look at your current policy and suggest some better alternatives – if we need to.