With life insurance contracts the ‘gold standard’ for exclusions is just one: self-inflicted injury during the first thirteen months. In effect that means after holding a policy 13 months there are no exclusions. That is a great deal of peace of mind for the client and simplifies the contract to something like ‘if you die, we pay’ everything else is a reminder that you needed to tell the truth, and extra benefits like inflation adjustment and special events increases.
Earlier this week we published a list of exclusions taken into account in the Quality Product Research scores available on Quotemonster. That prompted one eagle-eyed adviser to write to us and draw our attention to some additional exclusions that one insurer adds to their life cover:
“you participating in a criminal or illegal act; you being in a country or region in which the New Zealand Government has advised against all travel or advised that all non-essential travel should be deferred. These countries or regions are currently classified as ‘Extreme’ or ‘High’ risk and can be found at www.safetravel.govt.nz. If the New Zealand Government no longer publishes these ratings, we will use the last rating list published by the New Zealand Government or choose an alternative list that we will inform you of on or before the next anniversary of the start date of your policy;
you engaging in a work or a lifestyle activity that involves explosives, weapons, heights above 20metres, depths below 30metres or speeds above 130km per hour other than as a fare-paying passenger on a commercial airline.”
Parts of the Philippines are excluded under this definition, for example. This was from the AA Life policy document. We are contemplating the right weightings to be applied to the travel-based and activity-based exclusions.
Review the original exclusions post at this link.