Life Insurance Exclusions

Even the top life insurance companies in Australia offer policies with exclusions. As such, it's important to be aware of the following when you buy your insurance:

Suicide and self-harm

Some policies may not cover claims made relating to suicide or self-harm. However, these will generally only be excluded if they take place within the initial exclusionary period set by your insurer, which is typically the first 13 months of your policy. Claims made after this period can be paid out, though your coverage will be subject to your insurer’s terms and conditions. Coverage can also be excluded from total and permanent disability (TPD) insurance policies if you become permanently disabled due to self-harm or attempted suicide.

Incidents relating to drug or alcohol consumption

If your claim is being made as a result of drug or alcohol use, it will also likely be denied. There are some exceptions to this blanket rule, though; if the drugs in question were medication prescribed by a doctor and consumed as advised, the exclusion most likely won’t apply and you can receive a payout from your claim.

Incidents relating to illegal activity

Similarly, any injuries or accidental deaths which occur in the process of committing a crime will be excluded from your life insurance coverage by your insurer. This exclusion may cover a wide range of potential illegal activity, ranging from more serious crimes such as an armed robbery to those in which you may not even be aware you’re breaking the law, such as trespassing on private property.

Pre-existing conditions

Some insurers will exclude coverage if you fall ill, are permanently disabled or pass away due to a pre-existing condition. Providers will typically have a list of pre-existing conditions which can and can’t be covered, but these are often assessed on a case-by-case basis. As such, your pre-existing condition may be covered if you’re able to satisfy your insurer’s qualification criteria. While some insurers will require you to undergo a medical exam if you have a pre-existing condition, others may not require you to do so.

High-risk professions

The job you’re working in may also be excluded from your policy coverage in certain situations. When assessing your application, insurers will consider your employment as a factor in determining the level of coverage you’re able to receive. Examples of industries which can fall into the high-risk category include mining, health (such as nurses or doctors) and other areas dealing with heavy machinery and hazardous substances. You may be able to access coverage even if you work in a high-risk position if you pay more for your life insurance, however (subject to your insurer’s terms and conditions).

Travel to countries with government warnings

Finally, some insurers may also exclude any incidents which originate overseas in a country with government-issued travel warnings in place. You may find that if you’re travelling to a country with either “Reconsider your need to travel” or “Do not travel” as the listed advice, anything occurring there which results in your death, critical illness or injury or permanent disablement isn’t covered. Some insurers may cover you regardless of travel warnings, however.

It’s important to note that not all of these exclusions are applied as a blanket rule across the board. Different insurers will have different rules for their policies and what is and isn’t included, so it’s always crucial to compare offers before you buy and read the fine print.