Applying for life insurance doesn’t have to be daunting. You might find that your cover comes with exclusions or loadings, but what does this mean?
We break down what these terms exclusions and loadings mean and how it will affect you.
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:
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
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.