Life Insurance Exclusions: Five Things Most Policies Don’t Cover

• They outline specific situations where the death benefit may not be paid.
• Common exclusions include suicide within the first two years, fraud or misrepresentation, high-risk hobbies, illegal acts, and war or terrorism.
• Contestability and waiting periods allow insurers to review claims closely in the first two years.
• Riders like AD&D may help fill certain gaps, but not all exclusions can be avoided.
• Understanding exclusions up front helps you choose the right policy and set clear expectations for your family.

Basically, exclusions are clauses in your policy that limit when the death benefit will be paid. Insurers include them to prevent fraud, manage risk, and keep premiums affordable for everyone.

While the language can sound technical, the idea is simple: if a death falls under one of the listed life insurance exclusions, the company may deny the claim or pay a reduced benefit. That’s why it’s important to read your policy closely and ask questions before you buy.

Every insurance company handles exclusions differently, but most share a core set. These are some of the most common situations where a claim might not be paid:

• Suicide clause: Most policies won’t pay the death benefit if the insured dies by suicide within the first two years (one in some states). Premiums are usually refunded instead.
• Dangerous activities: Deaths from high-risk hobbies like skydiving, scuba diving, or racing may not be covered.
• Fraud or misrepresentation: If false information was given on the application (like not disclosing a medical condition) the company can deny the claim.
• Illegal activity: If death occurs while committing a crime, coverage typically does not apply.
• War or terrorism: Some policies exclude deaths caused by war, terrorism, or acts of conflict.

Exclusions are a normal part of any policy, and knowing what they are ahead of time helps you see exactly how your coverage works.

Exclusions can feel abstract until you see how they play out. Here are a few examples of how certain situations could affect a claim, and what alternatives these policyholders may have considered instead:

Hidden Health Condition

Mark applied for term life insurance online. He didn’t have to undergo a medical exam but instead answered a few questions. Mark intentionally left out that he was a long-time smoker because he knew premiums would be higher.

When he died of lung cancer three years later, the insurer discovered the omission during the claim review and denied the payout, leaving his family with only refunded premiums. Had Mark been truthful on his application, he still could have qualified for life insurance at higher rates, but his family would have been financially protected.

High-Risk Hobby

Denise loved scuba diving and listed it as a hobby on her application. A few years later, she passed away after a diving accident. Because her policy excluded hazardous activities, the claim was denied. Denise may have been better served with different insurance coverage like a guaranteed issue policy or an accidental death and dismemberment (AD&D) policy.

Guaranteed issue doesn’t look at health history or hobbies, and AD&D is designed to pay out in cases of accidental death.

Suicide Clause

James purchased a policy but died by suicide just 18 months later. Because the policy included a two-year suicide waiting period, his beneficiaries received only the premiums he had paid. Understanding this clause ahead of time wouldn’t have changed the tragic outcome, but it could have helped his family avoid confusion and frustration when the claim was processed.

These scenarios show how life insurance exclusions can affect real families, and why it’s critical to understand them before choosing a policy.

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In addition to exclusions, most life insurance policies also include clauses that apply in the first two years. These usually take the form of a waiting period and a contestability period.

How Long Does the Contestability Period Last?

The contestability period usually lasts two years from the date the policy begins. During that time, the insurer can investigate and deny claims if they find inaccurate or omitted information on the application. Once that window closes, the insurer generally can’t contest your answers anymore — though standard exclusions, like suicide clauses or illegal activity, still apply no matter how long the policy has been in force.

What Is a Waiting Period?

A waiting period is a separate two-year clause found in most policies, often tied to the suicide exclusion. If death occurs by suicide during this time, the insurer refunds premiums but does not pay the death benefit. After the waiting period ends, suicide is generally covered like any other cause of death.

Exclusions can’t be removed, but many life insurance companies offer riders or add-ons that help fill the gaps.

• Accidental Death Benefit Rider: Provides an extra payout if death results from an accident, which can help offset exclusions around hazardous activities. (In the Denise example, her standard benefit would likely be denied, but an AD&D rider could still pay its portion.)
• Waiver of Premium Rider: Keeps coverage active if you become disabled and can’t work, reducing the risk of policy lapse.
• Guaranteed Issue Policies: While not a rider, these policies accept applicants without health questions, making them an option if health exclusions are a concern.

Exploring these features with an insurance agent can help you find coverage that works better for your circumstances.

While these types of life insurance differ in how long they last and how premiums are structured, their policy exclusions are usually very similar. Both typically include suicide clauses, restrictions on high-risk activities, and protections against fraud or misrepresentation.

The main difference is timing. With whole life, exclusions apply over a much longer horizon, since coverage lasts for life. With term life, exclusions may feel less relevant if the policy is only in place for 10–30 years, but they still apply during that period.

Exclusions are a normal part of every life insurance policy, but they don’t have to leave you guessing. Understanding the circumstances where they apply helps you choose a plan that fits your needs and avoid surprises later. Ethos makes it simple to compare affordable term policies and guaranteed issue options if health is a concern, so you can find coverage that gives your family lasting peace of mind.