Top 8 most surprising deaths covered by life insurance
No, your life insurance will not only cover you if you die peacefully in your sleep at the ripe old age of 102. In fact, life insurance applies to most causes of death. Some are so surprising, in fact, that we decided to compile a Top 8 list.
Life Insurance 101: The Contestability Period
But first, a few words on contestability period. It was created to prevent adverse selection, which is when a person takes out insurance knowing they might very well be dead in a few months.
It gives insurance companies two years from the date your insurance was purchased to verify the information you gave on your application.
So if you should die during the first two years of your life insurance policy, the contestability period allows your insurer to open an investigation that may include requests for following:
- an autopsy report
- an order for medical records
- a statement from your insurance agent
- interviews with your family and friends
So let’s say you failed to mention in your insurance application that you smoke, and you die of lung cancer a year later. Chances are, the investigation into your death will reveal that you were a tobacco user. Because you gave incorrect information, your insurer could choose not to pay your insurance to your beneficiaries.
However, the erroneous information in your application must have bearing on your cause of death for the insurer to refuse your claim. For example, if you wrote that you were born on April 1, 1982, instead of May 1, 1982, an insurance company would never refuse to pay your insurance.
Once the contestability period is over, your insurance can no longer be disputed, unless there was fraud (a deliberate misrepresentation of claim). Hiding the fact that you are a smoker from your insurer, for instance, is fraud.
8 – You go missing
There are two possible scenarios if you go missing. If there is proof of death—e.g. in the case of a plane crash or shipwreck—courts will declare you officially dead.
If there is no proof of death—e.g. you walk out the door one day and are kidnapped or stricken with amnesia, never to be seen again—your beneficiary has to wait seven years for you to be declared officially dead. What’s more, your beneficiary must continue paying your premiums in the meantime to be entitled to your insurance.
7 – You die in a car crash while under the influence of drugs or alcohol
Even if you caused the accident, your insurance company will pay out. If, however, you are covered for accidental death on top of your regular life insurance, giving an additional amount in case of a fatal accident, your insurance will not be paid.
6 – You die on the operating table
Every type of surgery is covered—even plastic surgery.
5- You commit suicide
Your benefits are paid in full if you die two years after your life insurance was purchased—in other words, after the contestability period. If not, the insurer will give your beneficiaries the premiums you paid.
4- You die by assisted suicide
Physician-assisted suicide falls into the suicide category for an insurance company. Therefore, your coverage is paid in full if you die two years after you purchased your insurance.
3 – You die of an overdose
Accidental poisoning (overdose) due to medication or drugs is also considered suicide.
2 – You die BASE jumping, skydiving, scuba diving, etc.
Your beneficiaries will receive your benefits if you die during an activity that is considered dangerous, such as paragliding, BASE jumping, skydiving or scuba diving.
Remember, though, if you take part in any of these pastimes on a regular basis, you have to say so when buying your insurance. The insurer may decide to exclude this activity from your coverage. If this is the case and you die while participating in this activity, your beneficiaries will not be paid your insurance.
But if you die trying skydiving for the very first time, you will be covered.
1 – You die committing a crime
It may seem odd that insurers will pay the life insurance of someone killed while committing a crime. The reason is simple: life insurance is there to protect your loved ones. And so children of someone who breaks the law should not be punished for their parent’s actions.
In short, most deaths are covered. That being said, we recommend you read your insurance contract carefully to see what’s included, because exclusions may vary from one insurer to the next. Also, keep in mind that to be covered by your insurance, you must always pay your premiums. If you miss payments, your insurance will lapse, and you will not be covered in case of death.
If there’s one thing all insurers, without exception, never cover, it’s the murder of an insured by a beneficiary. So you can rest easy—insurance does not benefit contract killers.