Life insurance policies come with a ton of fine print to ensure that your coverage remains in tack for the duration of your policy. All of the red tape you may come across when securing a new policy is to help limit any risks you may present to the insurer and ensure that your beneficiaries will still receive a death benefit in the event of your death. Here are a few risks to consider when trying to stay in line with life insurance policies.
Risky Career and Hobby Choices
Certain career paths and hobbies make being insured more difficult. However, if you do get insured, it may be with the understanding that death resulting from one of those riskier activities renders the policy ineffective. You may also be forced to pay higher premium fees to have coverage. These occupations and hobbies can complicate your ability to obtain life insurance:
- Aircraft piloting
- Mining
- Car Racing
- Roofing
- Truck driving
- Scuba diving
- Bungee jumping
- Mountain climbing
- Logging
Generally, any potential life insurer will supply you with a list outlining which activities are high risk. Additionally, during the application process, you’ll usually need to list your occupation and any hobbies that increase your risk of death. From there, they’ll let you know if your occupation or hobbies mean you’re not eligible for a policy.
Complicated Health Risks
Obtaining a life insurance policy usually means going through a medical exam to determine your health and, ultimately, your risk. If you opt for a non-exam health insurance plan or somehow secure a policy after lying about your habits, like smoking, your death may not be covered under your insurance policy.
Life insurance providers do not take lying lightly. False information on your application can put your beneficiaries at risk of not receiving the death benefit with an ineffective policy. Within this, it’s also important not to lie about your family’s health history. Neglecting to mention a history of high blood pressure in the family can spell out big trouble in the event of death.
Mental Health
Some mental illnesses can complicate your ability to have a life insurance policy. More specifically, suicide can be a leading clause in a policy. If a person commits suicide after taking out a life insurance policy, it may result in the policy not being paid out to beneficiaries. Many times, life insurance companies combat this likelihood by adding a suicide policy to a plan in which no life insurance plan shall be paid out in the event of suicide for X amount of time. Within this are the complications of proving whether the death was, in fact, suicide or accidental.
The Bottom Line
Life insurance is not a straightforward one-size-fits-all policy for people to hold. Instead, life insurance policies are highly individualistic and affect whether a plan is effective in certain circumstances. If you’re concerned that a characteristic of your life puts you at risk of not being covered, be sure to speak with potential life insurers about your concern and flexible plans that can work with your needs to ensure coverage all around. In some cases, the solution may be to opt for a term life insurance policy over a whole, but it can vary.