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September 20, 2019

Are Losses After Natural Disasters Covered by Life Insurance?

natural disasters and life insurance benefits

Life insurance is there to help pick up the pieces after the loss of a loved one. Without it, many individuals would not be able to maintain their way of life, keep their home, or send their kids to college. Life insurance can be essential for virtually everybody.

You might be wondering if there are any cases in which a life insurance policy would not pay upon the death of the insured. With natural disasters occurring more and more frequently, you might question if a policy would pay after a death due to a natural disaster.

The short answer, for the most part, is ‘yes.’ However, policies vary, and it’s important you read through and understand your policy thoroughly to know what your policy does and does not cover. If you have any questions, contact the company through which you purchased your policy.

According to The Balance, natural disasters have a huge impact on the economy, and are even considered a bigger threat than terrorism.1 (The Balance notes natural disasters include blizzards, droughts, floods, heat waves, hurricanes, lighting strikes, tornadoes, tsunamis, earthquakes, mudslides, volcanoes, and wildfires.) The possibility of death from a natural disaster adds to the long list of reasons why you should have a life insurance policy in case you are impacted by such an unfortunate event.

Though insurance companies would not typically deny a life insurance claim for death caused by a natural disaster, there are several circumstances under which a life claim might be denied. According to Life Ant, some examples when life insurance claim denials happen are:

  • The policyholder dies during the contestability period; during this time, the policy issuer may investigate the death and deny payment if inaccurate information was provided on the life insurance application;
  • The cause of death is not covered by the policy (again, it’s important to understand what your policy does and does not cover);
  • The policyholder withholds pertinent information; or
  • Premiums are not maintained2

Life Ant suggests contacting the insurance company if your claim is denied.

It’s a good idea to prepare for anything that might come your way – natural disasters included – so make sure you’re prepared with a life insurance policy that provides the coverage you want. If you have any questions, contact an independent broker or a licensed insurance agent.

  1. The Balance, Natural Disasters’ Economic Impact, 2019
  2. Life Ant, Reasons Why Your Life Insurance Claim Might be Denied, 2018

Categories: Life Insurance, Term Life Insurance, Whole Life Insurance

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