Life insurance is something of importance to a great many people. This is one of the reasons why so many insurance companies are in business. Although they do sell many other different types of insurance products. At the same time, many of those who buy life insurance don’t have a full understanding of what they are buying? There are some products that can be bought in life where one doesn’t need to know that much about it. But, life insurance is not one of them. The majority of individuals know their life insurance policy is going to be payable. Upon the natural death of the insured. The confusion comes in about what’s interpretation of natural death is.

What Does Natural Death Mean?

Death

The best way to understand what natural death means is to exclude what it is not. Natural death is not a death caused by accident. Or one caused from an act of nature. Plus, it is not one that has occurred because an individual has committed suicide. Or, has been murdered. These are all the exclusions from natural death. Meaning that death caused by any other cause would get considered as natural. Natural death occurs as a result of some type of disease that has rendered the body lifeless. It can occur at any time in life. Natural death is most often common in the elderly people.

Does Life Insurance Cover Old Age?

It is a common term to state a person’s cause of death as old age. This is not a term that the insurance company is likely going to accept. When they have to pay out a life insurance policy, they are going to be sure that they are paying for the right reasons. This is why they are so intense in knowing an individual’s health status. When they apply for insurance. Upon death, the insurance company wants a specific cause. As determined by the coroner. Or, the health official that has the authority to determine the cause of death.

Some think that if an individual is elderly and passes away that the insurance company is going to accept this as being death from old age.

Contestability Period

Period

One of the things that insurance companies look at carefully is the time span of the cause of death. Meaning that they look at the date that the policy gets taken out and the date of death. Sometimes there can be contestability. In a life insurance policy. Meaning that if the insured dies within a certain timeframe, there could be challenges. In regards to the insurance getting paid out. Or it may not get paid out at all. Most often the contestability. It is within a two-year period after the time the insurance was first taken out.

Insurance Investigation

During this period of time, the insurance companies have more options. For doing a more intense investigation. They will they check the autopsy report. Also, they have the option of being able to scrutinize medical records. They can also conduct interviews as they feel that are necessary. One of the reasons is that they may do this is because some individuals that have a terminal illness. Some will try and get life insurance knowing that they are ill. But may not have disclosed this on their insurance application.

Insurance Companies Want to Make Money

Insurance companies are in the business of making money. Having to pay out claims within two years is not something that is acceptable to them. Once the two-year period is passed it is far more difficult. For an insurance company to refuse paying out the policy. That doesn’t mean that they won’t of look into potential cases of fraud. Or misrepresentation of a claim. Fraud it can be in a broad spectrum. For example, individuals who smoke. Or did not disclose other pertinent information. That was asked for on the application are in essence creating a fraud.

What Can Be Included In The Natural Death?

Every insurance company is different when it comes to what they set as standards for payout. There are rules and regulations that Canadian insurance companies have to follow. Some insurance companies pay out easier than others. Some will challenge every single issue to create some possibility of not having to pay out. Other insurance companies will have good standards in place. But, will not challenge the insurance policy if the standards get met. There are some surprising cases where insurance companies have paid out. Where one may think that it is beyond the realm of natural death.

Missing Persons

One may think that if there is nobody of the deceased to prove death that the insurance would be void. This may not be the case. If an individual were to go missing and a beneficiary tried to claim on their insurance benefit, they would have to wait seven years. This is the mandatory time for an individual were nobody is present to get declared like that. Many don’t realize the beneficiary must take on the responsibility for paying the premiums. On the insurance policy that they are beneficiary of.

Sometimes a health issue can arise. During the course of an insurance policy was an individual needs surgery. There are occasions were individuals do die during an operation. The life insurance should cover this type of circumstance.

These are just two examples of several circumstances. That one would not consider a natural death that may very well get covered by the life insurance policy. Every insurance policy written by a specific insurance company needs scrutinizing. There could be clauses within the life insurance company policy. Ones that will exclude some of these situations or others. This is why it is so important that every individual completely read over their life insurance policy. To know exactly what is covered.

Medically Assisted Dying

This is another circumstance outside of natural death. That many insurance companies in Canada are now paying out on when it comes to life insurance. There are strict criteria in place for this.

Knowing What Does Life Insurance Not Cover?

insurance company

Just as it’s important to know what is covered it is important to know what is not covered. One should not assume that every insurance company is the same. Or, is going to provide the same amount of coverage. There can be many different exclusions in insurance policies. The insurance buyer needs to be aware of this.

Resources

http://nursinglink.monster.com/benefits/articles/117-death-by-natural-causes-explained
https://www.karmainsurance.ca/blog/top-8-surprising-deaths-covered-life-insurance/
https://www.sheridancollege.ca/alumni/news/canada-life-making-a-claim
https://beneplan.ca/how-will-life-insurance-claims-be-impacted-by-medical-assisted-dying-in-canada/