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Be a lawful citizen! It affects your life cover

10 June 2022
3 minute read
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Life cover is your final gift to your family. It ensures that, should you pass away, they will still be provided for financially. For this reason, you want to do everything in your power to guarantee that their claim will be paid out. One very important way to avoid a declined claim is to stay on the right side of the law.

The terms and conditions on your life insurance policy include a requirement for the life assured, (and policy owner if they are not the life assured) to follow the laws of the land! If you don’t, the claim on your life insurance policy may be declined, leaving your family and loved ones without the funds they so desperately need.

We took a look at 1Life’s life cover policies to find out which laws you should pay special attention to – although of course you shouldn’t break any laws at all!

Keep it legal

All 1Life policies have a general exclusion for claims arising from the life assured being involved in any illegal activity. An illegal activity is basically breaking the law, such as in these three examples.

1. Earning income from an illegal source

If the life assured earns income from an illegal source, that results in their passing or disablement, a claim will be declined. Illegal sources of income are proceeds earned from crime, such as:

  • Theft – when you sell stolen items
  • Fraud, for example, money you obtain from skimming bank accounts
  • Illegal activities, such as selling unlicensed drugs (heroin, tik, illegal cigarettes)

For example, if you are shot and killed while selling tik, your life insurance claim would be rejected as the death is a result of participating in an illegal activity.

Top tip: Make sure you indicate accurately in your application your source of income.

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2. Participating in a criminal activity

It is a crime to steal another person’s possessions, for example hijacking their car or breaking into their home and stealing their electronic equipment, or shoplifting. If a life assured participates in this or any other criminal activity and they pass on while doing so, resulting in a claim, a life insurance claim may be rejected by the insurer. Criminal activity could also include participating in an illegal strike or demonstration, so be sure you protest legally where possible!

In other words, your life insurance contract is valid if you are a law-abiding citizen. But remember that you must also meet all the other terms and conditions such as paying premiums when they are due.

Important to note: You claim would be declined if the life assured or policyholder perpetrates the crime. This does not apply if you are the victim of a crime.

3. Wilfully and materially breaking the law

Driving, with full knowledge, at 50km above the speed limit, is willfully and materially breaking the law. It’s also quite dangerous – please keep safe! Should a fatal accident occur, your insurance claim may be declined.

Another area you should pay attention to is which spaces you enter. For example, if you enter an explosive site or a game reserve, or cross a highway or railway track, you could be on the premises illegally! Again these are dangerous activities, so please be careful of where you travel and walk to and avoid dangerous places – even if they are not signposted and labelled as such.

Important to note: A claim would be declined specifically where you wilfully and materially break the law, and would exclude cases where you were not aware, such as having your drink spiked.

Don’t put yourself or your family in danger!

Your life policy is there to protect your family, giving them the ability to meet their expenses if you are not around to provide for them. Putting yourself in danger not only affects you, it can also affect them and mean they don’t receive a life insurance pay-out. Be careful, keep safe and follow the law! You’ll be taking care of yourself and your family in the process.

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