Types of Death Excluded From Life Insurance Coverage

It is considered fraud if you lie or omit something on your life insurance application. The life insurer may refuse to pay the life insurance claim if you lie about:

• Family health history
• Your health history, including pre-existing conditions
• Travel plans, especially to dangerous locations
• Risky hobbies or occupation

If you participate in risky hobbies, your death claim may not be covered by life insurance if these activities lead to your death. If you are honest on your application, the insurer may have a separate exclusion to sign as part of the application stating these activities are not covered, which can include:

• Scuba diving
• Flying a private plane
• Bungee jumping
• Hang gliding
• Auto racing
• Rock or mountain climbing
• BASE jumping

Homicide in itself generally falls under life insurance coverage, but the circumstances surrounding the death may dictate who receives the life insurance payout. If the primary beneficiary murders the insured or is involved in their murder, they are no longer eligible for the death benefit due to the Slayer Rule. Instead, the contingent beneficiaries will receive the death benefit, or it will go to the insured's estate.

Life insurance policies have a suicide clause, which prevents the death benefit payout in the first two years of the policy if the cause of death is suicide. This clause is in place to prevent someone from purposefully dying right after an insurance policy goes into effect. After the two-year window, insurers typically cover death by suicide. If the insured dies due to a drug overdose, the insurance company may deny the claim if they can prove the overdose was deliberate.

Some insurance companies may include an exclusion for terrorism or war, although it’s not common. For this reason, depending on rank and deployment status, active-duty military members might not qualify for life insurance. If the insured is on active duty, it’s best to speak with an insurance agent to determine which companies do not have this life insurance exclusion if you want coverage.

Life insurance does pay for natural death, including dying from old age or a disease like heart disease or cancer. Dying of natural death means dying from the body shutting down due to an internal factor rather than an external factor, like an injury or accident.

Life insurance covers accidents, which can include accidental death from overdose, poisoning, drowning, auto accident or other ways to die.

The beneficiary will receive the death benefit in the event of the insured’s murder, but only if the beneficiary did not commit the murder or play a part in it. If it’s found the primary beneficiary is involved in the murder, the insurer disqualifies them from receiving the death benefit due to the Slayer Rule. The death benefit then goes to the contingent beneficiary or the estate if there isn’t a contingent. Choosing the right beneficiary is important to ensure your death benefit is used according to your wishes, which may not be the case if the payout goes to your estate.

Once the two-year suicide clause contestability period has expired, life insurance policy coverage typically extends to death by suicide as long as there is no other clause in the policy that excludes it.