Like many other things we buy every day, life insurance has its own limitations too. But life insurance limitations are not cast in stone. They revolve around the following factors.
Your insurer will not pay your beneficiaries any death benefit if you intentionally commit suicide within a specific period of time. And if there is no reasonable proof that you are dead, your beneficiary will not get a dime from the insurance company. Also noteworthy is that most life insurance companies will not pay you if you died as a result of participating in terrorism.
Type of life insurance policy
All types of life insurance policy have limitations. For instance, f you buy a term life insurance policy, you will not have a cash value account, let alone have the privilege to borrow or withdraw money from your cash value. Even if the type of insurance coverage you buy has cash value, your insurer will limit the amount of money you can withdraw from it. Some insurance companies will even fix where you can invest your cash value and the amount of interest you can make from investing your cash value. As a policyholder of a whole life policy, you cannot get coverage for a short period of time.
The level of coverage you want also has limitations. This depends on your age, life expectancy, medical history, current medical status, gender, marital status, family, income, occupation, and other factors. In fact, some insurance companies may decline your application if find out that you smoke, drink alcohol excessively, or have any terminal illness.