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Must Know: Life Insurance Policies Exclusions

By Vikas Chandra Das
21 July 2022, 11:46 AM
life insurance policies exclusion

Life insurance is the best method by which you can ascertain the financial security of your family members after your demise.  But life insurance would not provide compensation in case of every type of death. Life insurance is after all a business that involves profits and losses that affect the insurance provider. To minimize their losses, every insurance provider has a list of exclusions associated with the life insurance policies it is providing.

What is the Meaning of Exclusions in Life Insurance?

Exclusions are those cases for which the insurance providers would not be providing any coverage. These cases or conditions are excluded from the scope of the insured event for avoiding losses for the insurance provider and are usually listed in the policy document. In simple words, the scope of coverage in an insurance document is narrowed down by the use of exclusions. If an insured person dies under suspicious circumstances, then the insurance provider investigates the cause of the death to find out if the death was caused due to a circumstance that is not covered in the insurance policy.

Let us talk about some of the major exclusions of life insurance policies.

Exclusions of Life Insurance Policies

1. Lifestyle-related Risks

Generally, insurance providers would keep a check on your various lifestyle habits. While the purchase of the life insurance policy, the insurer would inquire about the lifestyle habits of the applicant such as a smoking habit or drinking habit. Insurance providers believe that non-smokers are at less risk and would make fewer claims than that of smokers. So, the premium for non-smokers is also less than that of the policyholder who smokes. However, if a person has lied about his habits related to smoking or drinking and the insurance provider finds out this habit to be the cause of his death then his death benefit claim would be rejected. 

2. Participation in Illegal or Criminal Acts

Life insurance policies would not provide cover for risk arising from participation in any illegal, unlawful, or illegal activities. An individual who is taking any such risk is deliberately getting involved in a situation that can cause harm to him. This is one of the standard exclusions in a life insurance policy. These acts can include driving under the influence of alcohol or the death of the policyholder if he was not wearing a seat belt or a helmet while driving.

3. Suicide and Injuries which are Self-inflicted

Suicides or death due to any self-inflicted injuries is also another standard exclusion of life insurance policies. Life insurance providers do not provide cover if the policyholder has committed suicide within a year of the commencement of the life insurance policy. However, some insurance providers might pay back a percentage of the premium that has been paid by the policyholder after the deduction of any medical expenses or administrative charges.

4. Adventure Sports

Insurance providers do not cover the risk involved in various adventure sports such as rock climbing, bungee jumping, skydiving, paragliding, vehicle racing, etc. These activities are dangerous, have high life risk and an individual would opt for them on his own will. However, there are a few life insurance companies that have started providing coverage for the adventure sports only if the policyholder agrees to pay a high premium.  

5. Conditions Related to Pregnancy

Insurance companies do not provide coverage in case of health complications or death of a policyholder due to any complications related to pregnancy, childbirth, abortion, etc. 

6. Man-made Disasters

This is a standard exclusion which was quite common in the previous times than the current times. This would include the death of the policyholder due to war or any other activity which is war-related. It is not feasible to cover these risks as they would be affecting a huge number of policyholders together.

7. HIV and STD

If a policyholder dies due to being affected by HIV or suffering from some STD (sexually transmitted disease) then the claim for death benefit by his nominee would be rejected as these conditions are not included in the scope of the life insurance policy coverage.

8. Illegal Drugs or High Medicine Dosage

Rejection of a death benefits claim would occur if a policyholder dies due to the consumption of intoxicating drugs, alcohol, or abusive use of medicine dosage which has not been prescribed by a medical practitioner.

9. Death due to Pre-existing Conditions

In general, the deaths due to pre-existing conditions are not covered under the scope of a life insurance policy. If the policyholder has been suffering from some ailments before the insurance policy was purchased, then these conditions are not included in the policy’s coverage. Many insurance providers have a waiting period before which the pre-existing conditions would not be covered under the policy.


So, while you are purchasing a life insurance policy it is of utmost importance to read the policy documents carefully and know about the exclusions. It would be really painful if you have paid all the premiums diligently but the claims by your family members would be rejected due to the exclusions of the policy.

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