What Does Term Life Insurance Not Cover?

Term life insurance provides financial protection to your loved ones if you die unexpectedly. But, sometimes policies don’t cover every situation.

Here’s a list of conditions that are typically excluded or not covered by term life insurance:

Lying on your application

If you lie or fill in false info on your life insurance application about your age, medical history, height, weight, hobbies, travel, or drug/alcohol/tobacco use, an insurance company can deny a future claim and refuse to pay your beneficiaries. When applying for life insurance, honesty is truly the best policy!

Not paying your premiums

If you do not make required payments for your term life insurance, your policy can expire after the stated grace period, which is usually 30 days after the payment is due. Schedule your payments as you do any other household bills, so you don’t miss any.

Involvement in criminal activity

Term life insurance will not cover you if you die while committing a crime (e.g., a robbery).

Death by murder

Commonly known as the slayer rule, an insurer will not pay the proceeds of your policy to a person that is somehow involved in your death. Instead, the company will pay the money to your contingent beneficiary, or to your estate, if you did not list a contingent beneficiary on your application.

Participating in extremely dangerous hobbies

If you perish while doing something risky, like skydiving, bungee jumping, car racing, sword swallowing, etc., your life insurance company may not pay your claim. So, it’s best to check the terms and exclusions in your insurance policy before you decide to take up a dangerous hobby.

Ending your own life

To prevent people from taking their own lives, many individual term life insurance policies will not pay the death benefit if the person who is insured commits suicide within the first two years of buying his or her coverage. (If suicide occurs, beneficiaries may only receive the amount of money that was paid for the premiums.)

Experiencing complications during childbirth

Sadly, term life insurance may not pay your beneficiaries if you happen to die because of complications during pregnancy and childbirth.

Failing to list beneficiaries on your policy

If you don’t list who should receive the money from your term life insurance, the company will issue it to your estate and a court will decide who should get the assets. (This situation would also apply if the beneficiary you listed is no longer alive at the time of your death.) So, make sure you specify who should receive the money and review and update your list of beneficiaries from time to time to make sure this situation doesn’t occur.

Want to review your term life insurance coverage to ensure it meets you needs? Contact us today!


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