The premiums you pay for insurance policies are determined by how risky you’re deemed to be by the provider. This means that the more you partake in more dangerous hobbies or the lower your overall health is, the more you can expect to pay for your life insurance policy.
When you are given your life insurance policy, it’s important that you make sure your coverage is working properly for you and your lifestyle. Many people face denials when they apply for protection because of one lifestyle choice or another.
The main culprit for being turned away is usually when you practice a dangerous hobby like rock climbing or skydiving. So what can you do in this instance? There are a couple of options for you; you can find another insurer that will work with you and your hobby or you can eliminate it from your contract’s exclusion clause.
As we all have differing opinions about what is dangerous and what isn’t, the chance to pick whether your pastime is covered or not is very beneficial and offers more freedom (at a cost) when buying a plan. But it can also bring more hardships for some looking to be properly covered.
How Do Exclusions Work?
Typically, your life insurance policy will contain a list of various dangerous activities that won’t be covered if you die as you take part of one or more. These activities aren’t covered for the sole reason of being deemed too high-risk. Even though there are plans that cater to those who struggle to get coverage, provider’s still mainly want to insure those who pose a low-risk.
If you want to exclude your particular hobby from your policy’s exclusion clause, you can do so at a price. By excluding that dangerous activity, you choose to pay higher premiums as a supplement to having that dangerous activity be covered.
People choose this option for many reasons, but it is mainly for someone who wishes to continue practicing their hobby without any insurance worries. Pilots are common people who face this issue of exclusion clauses when purchasing life insurance.
When pilots purchase life insurance from an insurance company, they often have general aviation excluded from their contract. This then forces commercial and private pilots to pay more in premiums to add aviation coverage in their contract and get properly protected.
Look Closely at Your Contract
Unfortunately, when it comes to exclusions your insurance contract doesn’t make them very clear and apparent. Often they can be found in the fine print and can be missed entirely if your insurer doesn’t take the time to clearly explain them. It is essential that you either look through the entirety of your contract or have a broker help you to ensure you are not signing up for any surprises.
What is normal are contestability periods. These are typically two-year periods in which the insurance company can contest your policy. During this period your insurer will check the validity of your details to make sure anything isn’t misrepresented.
If you file a claim within the two-year period and the company finds a piece of information you gave to be misrepresented, they can effectively void your policy. This is somewhat different from exclusions, but it similarly can keep you from obtaining your benefits should false information be found.
Finally, exclusion clauses can protect insurers from people that die while breaking the law. Illegal actions under this exclusions clause can range from the most serious of crimes to simply driving over the speed limit. If you die while partaking in any form of illegal activity you could be denied your benefits.
A Helpful Brokerage
At Canada Life Insurance, we believe that communication with our clients is imperative. When our team is with you, we take the time to go over all sections of your contract to ensure clarity. Along with our 20 carriers, we can assist you with any questions you may have and look to make getting a great plan a simple experience. It’s common for a life plan to have some exclusions, but if you have a supportive team like us behind you, the process will always work in your favour.