Covered / Not Covered

Considering the wide range of available insurances, life insurance is one of the easiest to understand. Life insurance pays money to your survivors when you die, or when you are diagnosed with a terminal illness. This cover is essentially guaranteed providing that you consistently pay your insurance premiums when they are due, and follow the terms of the insurance policy to which you have agreed.

However, there are conditions which will invalidate an insurance policy. You are not covered by your policy if you lied on your application and fraudulently applied for life insurance. You are also not covered if you misrepresented your personal details, or left information undisclosed that would have been of interest to your insurance provider, for example if you failed to tell them that you are a smoker.

The specific terms and conditions of individual policies vary, but many will have a suicide clause; this asserts that your life insurance will not cover your death if you commit suicide within one or two years of taking out the policy. This protects the insurance company from paying money out to survivors of a customer who took their own life after purchasing life insurance the day before for example. Often critical illness cover is only provided when purchased separately or as an add-on to a conventional life insurance policy. In short, this means that unless you specifically request the cover, do not assume that you will receive a pay-out if you are diagnosed with a serious illness. For more details on this topic see Pay-out Refusal.