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Does Life Insurance Cover Natural Death?

Does A Life Insurance Policy Pay Out A Death Benefit If The Insured Person Dies From Natural Causes?


The answer is "Yes"


Life insurance coverage is meant to provide a lump sum death benefit payout to the person or persons you select as beneficiaries of your life insurance policy in the event of your death from natural causes, accidents and most diseases.


A natural death or death caused by health-related issues is covered by life insurance plans. In case the policyholder dies due to any type of critical illness or medical condition, the beneficiary(s) of the insurance policy will get the sum assured as the death benefit.

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Life insurance is a written contract between the owner of the insurance policy (insurance policy holder) and a life insurance carrier, where the life insurer promises to pay a designated beneficiary a sum of money (death benefit) in exchange for the premiums paid to the insurance company, upon the death of the insured person. 

Depending on the life insurance contract, other events such as critical illness or terminal illness can also trigger payment from the life insurance policy to the insured person by the insurance carrier. 


These are commonly referred to as accelerated death benefits when paid out due to a diagnosis of terminal illness.


The policy holder (owner of the insurance policy) typically pays a premium, either regularly or as one lump sum, to the insurer.


Life Insurance Policy Exclusions


Here is a List of Common Exclusions for Life Insurance Policies:


Act of War - This "common" life insurance exclusion isn't as common as it was before the 1970s, but you should still check your policy to see if it is included. This exclusion means that if your death is the result of war, the life insurance company may not pay out the death benefit on the policy. 


Aviation - Usually, insurers may not pay out a death benefit if you die in a private plane crash. However, most (if not all) life insurers may pay out your death benefit if you die in a commercial plane crash.


Dangerous Activity - Some life insurance policies include dangerous activities in their list of exclusions. Dangerous activities can include anything from rock climbing to SCUBA diving to hang gliding, or race car driving. 


Illegal Activity - Most insurance carriers also include illegal activities on their life of exclusions. This means that if you die while doing an illegal activity, your insurance policy may not pay out the death benefit to your beneficiary. You might automatically assume that this exclusion is referring to illegal drugs or alcohol, but your beneficiaries could also be in trouble if you die in a car accident while speeding or not wearing a seat belt in a state where wearing your seat belt is the law. 


Suicide - Most life insurance policies list suicide as an exclusion, if it occurs within the first two years of being insured (one year in some states). Insurance companies will typically not pay out a death benefit if the insured person commits suicide within two years after the purchase of the life policy. However, beneficiaries may receive a refund of the premiums that have been paid, plus interest, depending on the insurer.


Keep in mind, not all life insurance policies have the same exclusions. That’s why it’s a good idea to review all the exclusions of your coverage prior to paying for your life insurance policy. 

Other Types of Common Life Insurance Exclusions


Contestable Period - Most insurance policies have a contestable period in which they can review the underwriting of the insurance policy and decide whether or not the information provided was misrepresented or withheld. If the insurer finds something, they may not have to pay out the death benefit on your policy. The contestable period is usually for the first two years you are insured.


Material Misrepresentation - This is similar to the contestable period but lasts for the entire duration of your life insurance policy. Basically, if you withheld information or misrepresented yourself in order to get approved for life insurance and the insurance carrier finds out, they can cancel your insurance policy at any time. 


Misstatement of Age - If you lie about your age to your life insurance company, they may not pay out your death benefit when you die. 


Each insurance carrier has their own approach to how they assess a risk for life insurance and how they manage that risk by applying specific exclusions to a policy.

Some life insurers will apply an exclusion to your policy to exclude death resulting from a specific type of risk the insurer does not wish to insure.

For example, if you are a skydiver, the insurance company may exclude death resulting from any skydiving activities.


NOTE: If you have questions about what is or is not covered as a cause of death on your life insurance policy, make sure you call your insurance agent and/or insurance company and request their response in writing. 

Keep their written response in your files with your life insurance policy.




Yes, life insurance does pay out a death benefit if you die as a result of natural causes. 


Life insurance covers death resulting from natural causes, most diseases, old age and accidental death. 


However, once you receive your life insurance policy, make sure to review the exclusions section to verify what is and is not a covered cause of death.



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Does Life Insurance Cover Natural Death?

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