Exclusions are conditions under which you will not be able to claim for the insured benefit on your policy. Here are the common exclusions you will find in your policy document:
Suicide
Most life insurers exclude life cover for suicide for the first two years, and funeral cover for the first year, after a policy is taken out. This is to prevent someone from taking out life cover with the intention of committing suicide shortly afterwards and their beneficiaries collecting a benefit.
This clause may be applied again if your premiums lapse and you restart your policy or if you increase your cover amount.
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IN NUMBERS Policy exclusions may seem onerous especially when a policy document is lengthy and couched in unfamiliar language. But don't let that put you off taking out essential cover. Most claims against policies do get paid out by life companies. 32 072: the number of claims against fully underwritten policies in 2019 219: the number of these claims not paid 44: of the 219 were not paid because of the suicide exclusion 16: of the 219 claims were not paid because of other exclusions in the contract 43: of the 219 were not paid because they were fraudulent 116: of the 219 were not paid because of material non-disclosure Source: The Association for Savings and Investments South Africa's 2020 annual death claim benefit statistics for fully underwritten individual life policies |
Dangerous activities
Life insurers typically exclude cover for life and disability resulting from dangerous or hazardous activities or sports. These activities can include anything from bungee jumping to rock climbing to hang gliding. Flying a private plane may be included as a dangerous activity, but you will be covered for flying in a commercial plane.
Companies may or may not have a complete list of these activities. Others can deem an activity hazardous, so it is best to check with the company before you take up a potentially unsafe activity.
Some life insurers will specifically underwrite you for a dangerous sport.
Dangerous places
Life insurers may also exclude cover for life, disability or funeral benefits if you are living or working in a place the life insurer deems to be dangerous.
Illegal activities
Some life insurers also have exclusions on death, disability or funeral benefits arising from illegal activities. If your policy has such an exclusion, it is likely to mean that if you die while carrying out a crime such as murder, hijacking or a burglary, your insurance policy will not pay out. The exclusion could even extend to taking illegal drugs, speeding or not wearing a seat belt, but check your policy terms and conditions.
Drinking too much alcohol or taking drugs
Life companies can also exclude cover for life, disability, funeral or dread disease if you consume excessive amounts of alcohol, consume excessive quantities of drugs or poison. This exclusion is less common for life benefits but may apply on on disability and severe illness policies.
Self-inflicted injury or illness
If your policy has a clause excluding benefits for inflicting an injury on yourself or being grossly negligent and you then die, are disabled or contract a severe illness as a result of the injury or negligence, your life insurer will not pay benefits for life, funeral, disability or severe illness.
Acts of war, terrorism or civil commotion
If you die or are disabled while participating in an act of war, terrorism or civil commotion, your policy may not pay out a death benefit due to an exclusion for these activities. Some policies say this includes wars, declared or not. Some say you have to wilfully participate in these activities for the exclusion to be applied, others do not specify whether your participation needs to be voluntary or not.
Check your policy to see what the terms say.
Radioactivity or nuclear explosions
This exclusion is often found on disability and dread disease policies. Benefits will not be paid out if your disability or illness is a result of exposure to radioactivity or a nuclear explosion. Some policies’ exclusions extend to exposure to atomic energy, biological and chemical hazards.
Failure to get or follow medical advice
Severe illness and disability benefits may be withheld if you did not seek or you ignored medical advice after you were injured or became ill.
Pandemics
South African life insurers are not currently excluding cover for pandemics like the Coronavirus pandemic, but you may be asked about your exposure to the illness.
Pregnancy
Income protection policies may have an exclusion from benefits for any time you are unable to work due to your pregnancy.
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