I am interested in understanding how life insurance works. I signed up for permanent life insurance, hence I am in my 20s. I have a contract which I am reading and trying to understand and that question came to mind. Really wanting to learn and understand.
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You’re going to need to be more specific on what you’re looking for or asking about?
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What are some conditions life insurance companies include in their contracts that could stop the beneficiary from receiving a payout if the insured person dies? I’m not sure how to ask this clearly, so I appreciate your help. Thanks.
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All contracts are pretty standard in this, and approved by government regulators. So for the most part there’s not going to be any exceptions that should surprise you. They should all make sense logically because they only exist to prevent insurance fraud.
The most common ones are:
(1) Murder. Obviously I can’t kill my dad for the life insurance money, or have somebody else do it for me.
(2) Lying about certain things on the application. If I have been diagnosed with cancer, apply for life insurance and put on the application “I don’t have cancer,” and then die from it? They can deny the claim.
(3) Suicide. If this is why you’re asking, I would urge you to find help. There are other ways out of how you are feeling right now, and your family and friends would much rather have you than any money.
(4) There’s certain dangerous activities (sky diving is one) that are excluded. They’ll be noted somewhere, usually on the application.
Some of these are also only applicable within the first two years of the policy, but as long as you’re honest through the entire application process and just die organically, then the policy will pay out like it should.
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Dont eat a bullet the first two years is a big one.
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If you can post your in force illustration and block any personal info (if needed), can help you figure out what’s going on
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I know they won’t pay out for suicide, but your policy could have other conditions too. They can also deny payment during the contestable period if you knowingly lied on the application.
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