Life insurance companies and agents often get a bad reputation because people feel the insurance company is looking for an out on the policy.
One life insurance exclusion is suicide within the first two years of the policy. If the insured commits suicide after two years the life insurance policy will pay out. Of course, this assumes that the insured answered the application questions honestly and did not leave out any pertinent details.
Also a life insurance policy will not pay out in the event of fraud. An example an applicant looking to buy or a life insurance policy after he or she finds out that they have been diagnosed with cancer. If there is a cancer -related question and the insured answers "No" when the answer should have been "yes" and subsequently dies, the life insurance policy will not pay out. Add to that, this is irrespective if the insured dies by cancer, as the policy in this instance is not pay out, not because the cause of death but the insured lied on the application.
Some life insurance policies have exclusions if death occurs within certain regions of the world. These exclusions are different than the suicide exclusion, in that suicide applies to all life insurance policies. Travel related exclusions are generally applied only if the insured travels to certain areas that the insurance company deems to be a high risk. The insurance company will include this exclusion in the policy at the time of issue. The life insurance policy will generally be issued with some type of amendment from that the insured usually has to sign off on before they receive the policy.
Life insurance policies may also have exclusions related to acts of war and related to death resulting from self inflicted wounds, actions, as well as criminal activity. In all cases it is crucial that the insured that the insured understand what they have applied for and when their policy will or will not pay out before they blame the insurance company or the broker when there is a problem
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