If you have a life insurance policy and you die from the complications of a medical condition or natural causes, it’s a pretty cut and dry case. Benefits will typically be paid to your beneficiaries as quickly as the death certificate can be issued and your death is verified by the insurance company. However, if your death is caused by other circumstances, your loved ones might face quite the hassle when trying to collect benefits and could be denied altogether in certain cases.
Accidents
Most accidents are typically covered by life insurance. However, accidental death often brings some added expenses and burdens to a family. You can help to ease this by opting to pay a higher premium that pays a larger benefit should your death be caused by an accident. In order for a claim to be paid, the insurance company will have to determine if, in fact, your death was caused by accident. Your contract should state reasons why an accidental death claim might be denied. In some cases, accidental death caused by your willing participation in risky activity could result in a delayed claim full of hassles or denial of benefits. If you are a risk taker, you might consider high-risk insurance, which recognizes this lifestyle more than the other guys.
Suicide
It is a sad event to see someone who has given up on life and ends it all by their own hand. An already devastated family now faces and even harder road. There was a time when most insurance companies would not even consider paying benefits if the insured party took their own life. While some companies still do observe this policy, the majority have come to realize that suicide does happen and has begun to pay benefits, under certain conditions. For the most part, a policy needs to be in effect for at least two years before benefits will be paid on this cause of death. That does not mean one should be considering this plan to end their life and wait it out to ensure benefits are paid. If you are suicidal or you think a loved one is, don’t wait until it is too late. Get help now!
Foul Play
Murder. A devastating, cold and callous event. In an ideal world, this would never happen. However, in reality, it does and we have to consider what would happen to and for our loved ones in that event. If foul play is suspected in your demise, the insurance company will hold up the payment of benefits until the investigation into your death is complete. They want to ensure that your beneficiary had no part in your death. While murder for insurance money happens more in movies than in real life, it is a felony crime and the insurance company does not want to see anyone wrongly benefit from your untimely and tragic death.
It is important to be aware of these provisions in your life insurance policy, but it is even more important to try and plan ahead to protect the ones you love.
