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Insurance Exclusions

Common exclusions from insurance include suicide, drug abuse, data breaches, and dangerous activities. If these activities took place, then the insurer will not pay for a claim.

Insurance policies list exclusions. An exclusion is a situation in which the insurer will not pay a claim. Depending on the policy, many insurance policies contain an exclusion for suicide. The plan does not provide coverage if an insured commits suicide within the first or second year of the contract, depending on the language of the policy. Under this exclusion, the beneficiary (one who receives the benefit or payment from an insurance contract or policy) would likely get the premiums back but would not receive the death benefits. The purpose of this exclusion is to prevent someone who is suicidal from buying insurance for the sole purpose of leaving the beneficiary in a better position, such as being able to pay off debts.

Dangerous activities are sometimes excluded from coverage too. Many policies exclude automobile racing, hang gliding, acrobatics, and mountain climbing. If an insured is injured or killed while engaging in a dangerous activity, coverage might be denied. Insurance companies handle many dangerous activities in one of two ways. Either they exclude them outright in the policy, or they provide coverage for the payment of a higher premium. Many insurance companies will not pay out on a policy if an insured is injured or killed due to war.

Most insurance policies contain provisions that, if not complied with, could result in a waiver, which would make an insured's right or claim invalid. For example, most insurance policies contain a provision stating that a policy can be cancelled for nonpayment of premiums or for nondisclosure of known pending claims. Typically, the insurance company must first send the insured a letter stating that payment has not been received and that coverage will be terminated if the late premium payment is not received within a certain number of days.