We break down what these terms exclusions and loadings mean and how it will affect you.

Exclusions

Is it all just red tape or a way to trap you? Exclusions are added by all insurers onto their life insurance policies to protect themselves from high-risk individuals. These are events or occurrences that an insurer will not cover due to the high level of risk on your life that it poses. This can affect you when it comes to placing a claim. Some of the exclusions that come with a life insurance policy are:

• 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.
• Commit or attempts to commit a crime
• Deliberately inflict an injury on yourself
• Drugs or medicine that has not been prescribed to you by a doctor or drinking and driving
• Deaths caused by suicide will not be paid within 24 months from the cover start date.

Loadings

Your insurer will ask you a range of questions regarding your age, health, lifestyle, and occupation which is also known as the underwriting process. These questions will give your insurer insight on the chances of you claiming in the future. This will affect your premiums. For example, if you are a firefighter or a construction worker the chances of you making a claim are higher compared to someone who works in an office. This could attract a loading. However, this can be removed or reduced should the cause of the loading be improved. For example, if you attract a loading because you are a smoker and then quit smoking or you have been cleared for cancer.

Key differences to remember

Exclusions

• These are risks that an insurer will not cover
• Can prevent a claim from being paid out
• Will not cover things such as travelling to high risk countries, participating in dangerous hobbies or activities, or deliberately inflicting injury on yourself

Loadings

• Affected by your health, age, gender, or occupation
• Can affect your premiums
• Not fixed but can be removed or reduced if your situation improves

Always remember to read the terms and conditions that come with your policy. Should there be anything that you still don’t understand, you can talk to your insurer to find out more.