It’s Wise to Be Aware about Life Insurance Exclusions
One of the least known but most important terms and phrases that you cannot escape knowing about life insurance is – life insurance exclusions. Exclusions are situations that stand in the way of your beneficiaries’ receiving the insurance benefit. That is, they are situations that may disqualify your heirs from being recipients of the death benefit.
You buy life insurance with a view for your heirs not to being deprived of receiving the death benefit. But if you pass on falling in the exclusions, you may leave them in a very undesired situation. And, you very well can imagine how your beneficiaries will be affected if so happens. This is why, you should be aware of the situations that may create instances of life insurance exclusions.
However, the exclusions mainly apply to term life insurance. Term life insurance is, you know, is made solely for the death benefit.
Theoretically speaking, whole life plans should not have instances of exclusions as they involve investment. But when it comes to death benefit, they may also involve situations that may affect your beneficiaries.
Good news is you don’t require an attorney in order for you to understand the exclusions. You can do it very simply—carefully reading the policy that your insurer hands over to you when you become their customer.
A list of life insurance exclusions may cover quite a few asterisk or bullet-point pointers. But, we are pointing out the most prominent ones of them that apply generally to all or most companies.
Waiting Period
A waiting period is the time till the end of which the death benefit does not convert. Typically, this waiting period varies from 1 anniversary year to 3 years. Two years is the most common.