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Does Cause of Death Impact Life Insurance Payouts?
Does Cause of Death Impact Life Insurance Payouts?
17 Mar 2021

How you die has ripple effects on many things. Not only does it impact your loved ones, but it can also affect your life insurance payout.

Insurers go through a review process to check that there has been no foul play to deter fraudulent claims on something that you have been working so hard to set up. Here is how your death affects the claim process.

 

The review process after claims

Once you have placed a claim on a life insurance policy with an insurer regarding a loved one, a review process begins. Life insurance payouts are known to take slightly longer due to this process where an insurer investigates that everything is in order and that the death of the policyholder was due to natural or accidental causes. This process is also to protect insurers and policyholders from fraudulent claims. 

 

Impact of exclusions

The manner in which a policyholder has died impacts whether a life insurance policy is paid out or denied. An insurer will inform a policyholder about the exclusions for things they will not be covered for.

 

For example, if a policyholder commits suicide within the first year of taking out a policy, the claim will be denied. This is to avoid having people kill themselves for the insurance payout or having their lives threatened to get access to their cover amount. Other exclusions include: 

 

  • Travelling to high-risk countries that are listed on your policy such as Afghanistan, Iraq, Burundi, Syria and so forth.
  • Participating in dangerous hobbies or activities such as cliff diving, unaccompanied scuba diving, solo climbing, mountaineering, motorised racing or speed contests.
  • Participating in riots, insurrection, civil commotion, or an act of terrorism.
  • Dying while Committing or attempting to commit a crime
  • Deliberately inflict an injury on yourself
  • Taking drugs or medicine that has not been prescribed to you by a doctor or drinking and driving.

 

When a claim will be denied

Taking part in anything that will put your life at risk is a red flag that can have a claim denied by an insurer. Not disclosing any medical information or lifestyle activities that can affect your life in some way is also known as being guilty of non-disclosure. It is vital to be 100% honest with an insurer to avoid having a claim denied. While there are certain medical conditions that an insurer can cover, it is important to be upfront about this to avoid having a claim denied. 

Need more information on MiWayLife? Read about our life insurance product, or get a life insurance quote in 30 seconds. Alternatively, call us on 0860 64 54 33 .
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Terms and conditions apply. Eligibility, cover and benefits are determined on individual risk profile. MiWayLife is an authorised FSP (No. 45741) and its product offering is underwritten by Sanlam Life Insurance Limited, a registered long-term insurer. MiWayLife is a division of Sanlam Life Insurance Limited - Reg No. 1998/021121/06