Life insurance policies are in place to help grieving families move on with their lives and give their loved ones a proper ceremony and send off. Unfortunately, every day there are stories about people who do not receive the life insurance payout of a family member based on circumstances that voided the policy. These often come a surprise, but there are many common ways that an average life insurance policy can be voided. Remember, it is always important that you discuss your life insurance policy in detail with your provider so that you fully understand the circumstances that can lead to voiding your policy. That way, there are no surprises for you or your loved ones.
Many life insurance policies do not explicitly cover military service people who are killed in the line of duty. There are, however, many policies that are specifically designed for military personnel and their families to ensure that those families have something in the event of an active military death. Unless explicitly stated, you can assume that your policy needs changes if you decide to join the military.
Drug & Alcohol Abuse
Many life insurance policies assume that the policy holder is not struggling with substance abuse, whether that is legal drugs, illegal drugs or alcohol. Many policies clearly state that they are void in the event of a drug-related death or as a result of complications from years of substance abuse. That said, there are still options for people who struggle with addiction, even cigarettes, to ensure that they have a life insurance policy in place. It is important to disclose these issues to your insurance provider so they can work with you to get a policy.
The phrase “dangerous activities” is fairly vague but it is safe to assume that, in general, it means activities such as skydiving, base jumping, high-speed racing, etc. You should contact your insurance provider if you are about to do something extreme to see if your policy, or accidental death rider, covers it.
Death in a “Restricted Area”
The Government of Canada puts out regular travel advisories for places around the world and many of the travel restrictions in place can affect your life insurance policy. Unless you are performing a job in a dangerous part of the world (and your insurance company knew about that work before you took out the policy), you can assume that active war zones and other dangerous parts of the world will void your policy.
Every day there are stories about the families and friends of someone who died realizing that a life insurance policy has been voided. Some of these stories involve tragic circumstances, most come as a surprise, and often it leaves grieving families with even more confusion. This is why it is always important to carefully understand any insurance policy that you have. Being informed will help you ensure that your loved ones can receive the benefits of your policy in the event of your death.