Insurance law allows exclusions in life insurance policies

Reading the fine print of a life insurance policy is a good idea because it often spells out important details that can affect the rights of beneficiaries. Those details in one’s policy may specify the exclusions, which are the circumstances under which the insurer can refuse to pay benefits. Understanding this critical element of insurance law can help Washington policyholders avoid leaving their loved ones with an uncertain future.

The purpose of a life insurance policy is to provide financial support for beneficiaries. However, if the death of the policyholder occurs under certain circumstances, such as while the policyholder is under the influence of drugs or alcohol, an exclusion in the policy may give the insurer the right to deny the claim. Other common exclusions include a death while committing a crime or death by suicide within the first two years of purchasing the policy.

An insurer may also deny a claim if the policyholder’s application contains materially false information. This can include intentionally supplying the wrong age or withholding information about a history of heart disease. Certain activities, such as skydiving or mountain climbing, may also be excluded, but a policyholder may have the option of paying extra for coverage for those activities.

There is also the possibility that the insurer will deny or delay a decision on a life insurance claim based on bad faith. In insurance law, this means the insurer has no good reason for not fulfilling its obligation to the beneficiaries. When an insurance company adds more grief to a Washington family by unreasonably denying a life insurance claim, the beneficiaries may seek assistance by reaching out to an attorney who has extensive experience holding insurance companies accountable.