Tuesday, October 19, 2021

5 Situations When Your Life Insurance Policy Won't Pay Out

 Life insurance is something that a lot of people don't think about, especially when they are younger. However, disaster could strike at any time and it's important that your family is protected, so you need to think about taking out a policy


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But one thing that people don't always realize when they first get life insurance is that it's not guaranteed to pay out. In fact, there are certain situations where your insurance company will refuse to pay a settlement to your family. Understanding your policy and knowing what situations are covered is the only way to make sure your family is protected. These are some of the situations when your life insurance policy won't pay out. 

Unlawful Denials

There are certain reasons for denied payments that are written into your contract, and we'll get on to those. But it's important to note that insurance companies will sometimes deny a claim without a legitimate reason. In this situation, you need to contact insurance claim attorneys and explain your situation to them. Knowing your policy inside out is the best way to avoid and fight unlawful denials, so read it properly before you sign anything.

False Information On Applications

The majority of life insurance applications ask if the person applying has any serious medical conditions. This is because certain illnesses can mean that someone won't live as long, which means they're more likely to die during the term of the policy. If you fail to mention something on your application then this could invalidate your claim. This doesn't just apply to health conditions either, any false information is grounds for denying your claim, so always double-check your forms before submitting. You also need to make sure you update your policy after any major changes to your life circumstances or your health. 

Terminal Illness

Some policies will not cover you if you have a terminal illness. This means that you have a very serious illness with no chance of recovery. Your insurer may decide to pay out a smaller amount, but they won't pay out the full amount. If you're buying life insurance then it's worth asking about their policy on terminal illnesses and which health problems will result in them not paying out. 

Suicide

If you commit suicide during the term of your policy then it will not pay out. Depending on when this happens, it could invalidate the policy completely. However, if you take out a policy and then attempt suicide but fail then this won't necessarily be considered to be a suicide attempt unless there is proof that you intended to end your life.

Outliving Your Policy

Most life insurance policies only cover you for a certain amount of time. If you outlive your policy then your insurance company won't pay you out, because the term is now over. That's why it's crucial to check your policy regularly and update it when needed. 


Knowing when your life insurance policy won't pay out is so important if you want to prepare for the future and protect your family. 


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