What are the typical life insurance exclusions and limitations?


All types of insurance policies have certain exclusions and limitations and may exclude the insured person from cover in certain circumstances.

The most common life insurance exclusions are:

  • Suicide clause
  • Dangerous activity
  • Aviation exclusion
  • Act of war exclusion

Other exclusions include drug or alcohol abuse, participation in illegal tasks, etc.

Suicide Clause

Under this provision the insurance company will not make any payments equal to the face amount of the insurance if the one insured commits suicide within 2 years since the purchase of the policy. Usually, insurance companies will only provide a refund of the total premium payments made.

This provision prevents individuals from getting a policy and then kill themselves with the intention of settling debts and providing their surviving family a way out of financial hardship.

Who determines if a questionable death is suicide?

The courts will be the ultimate decider as whether death is by suicide or not.

Initially, a medical expert will determine the cause of death and issue the corresponding death certificate. This certificate will be submitted by the beneficiary to the insurance company when making a claim. Upon receipt of the certificate, the company will carry out an investigation prior to issuing a check covering the proceeds.

When the claim is denied, the beneficiary can bring the matter to the Insurance Commission. If the parties involved do not come to an agreement at this level, the matter may have to be resolved by the courts.

Can the life insurance company refuse death claim payment if due to suicide?

Generally, life insurance policies have a clause that denies payment in suicide deaths within a waiting period, which is usually two years. During this period the company will only refund the premium payments but will not pay out the death benefits.

Can you contest a suicide on a death certificate?

Yes, you can. You can do this by first getting the records from the medical expert who issued the death certificate and getting the opinion of an independent pathologist. As procedures may vary from state to state, the pathologist will tell you what your next steps will be if his determination indicates that the cause of death is not suicide.

Can your beneficiary collect life insurance benefits after your suicide?

Yes, they can if the suicide took place during the incontestability period which is usually two years after purchase of the policy. When the policy reaches the third year and the insured commits suicide, the company is obligated to pay the death benefits no matter the cause of death.

For suicides that take place within the first two years, however, the company will only refund the premium payments.

Does a drug overdose break a life insurance policy?

The terms and exclusions of the policy should clear this out. Generally, if the overdose is accidental, the company may cover it. However, if there was intent as in intentionally doing it to commit suicide then it may be excluded during the two year waiting period.

Dangerous Activity

This exclusion provides that death of an insured because of certain activities like auto racing, rock climbing, hang-gliding, etc., will not lead to payment of policy proceeds. For some companies, these activities are covered as long as the policyholder agrees to pay higher premiums.

How do extreme sports affect life insurance

In some policies extreme sports activities are excluded from coverage. In others, these may be covered if the policy holder pays a higher premium.

Aviation Exclusion

This provision states that the insurance company will only pay if the insured is killed in a commercial plane crash. If the individual dies as a passenger in a private plane then the company will not pay.

War Exclusion

This provides that the insurance company will not pay if the cause of death is a result of war.

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