What isn't covered by life insurance?

Life insurance is there to make sure your family could get by if you pass away. So if you are killed in a road accident or die from a heart attack, to give just two examples, your family would most likely receive a payout.

However, there are certain common life insurance exclusions that you should be aware of. These include:

Suicide

Most life insurance policies state that if you commit suicide within a certain period after taking out the cover (e.g. 12 months), your family won't receive a payout.

Terminal illnesses

Some insurers will pay out early on diagnosis of a terminal illness, but unfortunately some won't if you are diagnosed towards the end of the policy (e.g. in the last year).

If you do something stupid

A life insurance claim may be disputed if your death is a result of 'misadventure', such as falling off a roof or taking part in extreme sports. This should normally be outlined clearly in the terms and conditions, so if you think you will be doing anything that could put your life in danger, make sure you find a policy that will still cover you.

If you live longer than expected

This isn't an exclusion, as such, but if you have a fixed-term policy and you die even one day after your policy expires, your family won't be eligible for a payout. For that reason, you should make sure your policy lasts at least until all your major financial commitments (e.g. your mortgage, raising children) are due to end.

All life insurance policies are different

No two policies are exactly the same. Some policies may avoid the common exclusions we've discussed above, but then again, some will have exclusions you might not expect.

Each insurer will have their own terms and conditions, so it's up to you to make sure your policy gives you the cover you need. Take the time to read your policy before you sign up, and if you're in any doubt, get in touch with the insurer and ask.