What Does Life Insurance Cover?

Shawn Plummer

CEO, The Annuity Expert

What Does Life Insurance Cover?

Life insurance policies can cover a wide range of scenarios. Here’s a comprehensive list of what they typically include:

Death Benefits

  • Natural Death: Coverage includes death due to natural causes like aging or illness.
  • Accidental Death: Unforeseen accidents resulting in death are covered.
  • Terminal Illness: Many policies offer payouts if the insured is diagnosed with a terminal illness.

Additional Coverage Options

  • Critical Illness: Some policies pay out on the diagnosis of certain critical illnesses.
  • Disability Income: Provides income if the insured becomes disabled.
  • Accidental Death & Dismemberment (AD&D): Specific payout for accidental death or loss of limb/sight.

Exclusions

  • Suicide Clause: Usually, suicide within the first two years of policy is not covered.
  • Fraud: Death due to fraudulent activities may not be covered.
  • Criminal Activity: Deaths during the commission of a crime are typically excluded.
  • Drug or Alcohol Abuse: Deaths due to abuse of substances may not be covered.

Policy Types and Their Coverages

  1. Term Life Insurance: Covers death during a specified term.
  2. Whole Life Insurance: Covers death at any age, plus cash value accumulation.
  3. Universal Life Insurance: Flexible premiums with death coverage and cash value.
  4. Variable Life Insurance: Investment options with death benefit and cash value.

Riders and Special Provisions

  • Waiver of Premium: Waives premium payments if the insured becomes disabled.
  • Guaranteed Insurability: This lets the insured buy additional coverage without medical exams.
  • Child Rider: Provides coverage for the insured’s children.

Tax Benefits

  • Death Benefit Payouts: Generally tax-free to beneficiaries.
  • Cash Value Growth: Tax-deferred in policies like whole life and universal life.

Miscellaneous Coverage

  • Funeral Expenses: Some policies include or offer riders for funeral costs.
  • Charitable Contributions: Option to allocate a portion of the benefit to charity.
Life Insurance Policy

Conclusion

Life insurance policies offer extensive coverage options catering to different needs. It’s important to understand what your policy covers and any exclusions it might have. Contact us today for a free quote.

Need Help Getting Life Insurance Coverage?

If you have a preexisting medical condition and want to buy life insurance, you will need help from an expert. This person can help ensure you get coverage so you don’t get declined.

Warning: Applying for life insurance without a medical exam can be risky. If you get declined coverage, it could be at least two years before you can get any life insurance.

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Frequently Asked Questions

What are five things not covered by life insurance?

The five things not covered by life insurance are preexisting conditions, accidents that occur while under the influence of drugs or alcohol, suicide, criminal activity, and death due to a high-risk activity, such as skydiving, and war or acts of terrorism.

Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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