Does Life Insurance Pay Out for Acts of War?

Posted on August 20, 2014 and updated June 10, 2017 in Insurance Types, Life Insurance Canada News, Life Insurance FAQ 5 min read
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When you buy life insurance, essentially what you receive from your broker is a promise. It’s a promise to be there for you and, most importantly, your beneficiaries. But when all you see in the news are the terrifying accounts of wars ─ the most recent outbreak in Gaza — it wouldn’t be surprising for some of us to doubt this promise.

Which leads us to the question: Does life insurance pay out for acts of war?

Most of the time, yes.

One of the most important things to understand when looking at your policy is knowing in which cases you are protected. Your life insurance contract may contain something called a “policy exclusion,” which means conditions that the insurance policy does not cover.

The war exclusion clause, which is under the category of policy exclusions, ensures that the insurance company isn’t obligated to pay for losses created by acts of war. It was originally intended to deny civilian claims for countries affected by war instead of to exclude soldiers.

Fortunately, “Exclusions for acts of war and serving in the military began to disappear following the Vietnam War,” says Bankrate.

“You don’t have the catastrophic risks you had in the first or second world war,” says Chris Graham, chief life insurance underwriter for The Hartford. “And the military is viewed differently today. I think there is a sense of patriotism in some of that thinking.”

A rule of thumb is that when looking at life insurance policies, if the policy does not contain the exclusion, then it is covered.

Contracts No Longer Contain Wording for War Exclusions

Christine Koukoulidis, Assistant Manager at Canada Life Assurance Company, responded to our inquiry on war exclusions in insurance policies:

“Our contracts no longer contain the wording that we would not pay out due to acts of war,” says Koukoulidis.

On the subject of military personnel, who are more difficult to insure than regular civilians due to the nature of their job, Koukoulidis assures that Canada Life does accept soldiers.

The key is to determine whether the military personnel have current or past deployment orders. “If they have never had deployment orders, nor have current ones, then we would underwrite them as any other occupation,” says Koukoulidis.

If these military personnel currently have active deployment orders, then they would be declined. If not, then the application would be accepted by Canada Life.

In the case that they have been previously deployed in the past, Canada Life takes the date and location of deployment into account when seeing what they can offer.

When we asked Empire Life about the impact of war exclusions on life insurance, they informed us that war exclusions are more generally found in accidental death insurance.

This makes sense because accidental death insurance is relatively cheaper than life insurance, therefore policy exclusions of all kinds are more commonly found. However, we don’t believe that individuals should rely on an accidental-death policy to protect their families, as that leaves many probable cases in which you are not covered.

“Act of War” Or Not: Malaysian Airlines Claims Will Be Paid

The recent Malaysian Airlines Flight 17 plane accident has shocked the world. While many questions remain unanswered, the one key question that ties in with the insurance industry is whether the crash was caused by an act of war.

As a kind gesture to families of victims of the crash, “the Dutch association for private insurance companies said its members would waive any exclusion for acts of terrorism or war,” says the Wall Street Journal.

The Malaysian life insurance companies chose to do the same soon afterwards, “saying its member companies won’t require death certificates and will speed up claims payments.”

Despite how this gesture could cost “tens of millions of dollars” to insurance companies, this shows that policy exclusions are not set in stone. Insurance companies operate with the interests of their clients in mind, and this is a great example.

We also reached out to Assumption Life, a Canadian life insurance carrier based out of Moncton. Assumption has no Act of War exclusion on their Life Insurance products however there is an exclusion for Accidental Death and Dismemberment, Critical Illness and Disability Insurance plans. This exclusion applies to public demonstration, riot, insurrection, war or military operation, whether war has been declared or not.

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Ami Maishlish
Ami Maishlish

I’d like to chime in on this if I may. In my view the only way to find an indication as to the answer to this question is through careful examination of the ACTUAL life insurance contract. Ultimately, it is the legal document which is the insurance policy contract that governs, and which would be a key reference point for a Court of law in the event of a claim dispute. I’d strongly suggest that you should not assume “ex gracia”; insurance companies are not charities but for-profit financial institutions. Even if the current policy contract documents don’t contain the… Read more »

Roxanne Tilton
Roxanne Tilton

Thanks for the information Dan on Met Life.

Dan Tripp CLU & Associates
Dan Tripp CLU & Associates

Pick up an individual contract from anyone. If the contract does not exclude it, then it will pay. My Metlife contract does not exclude death from war. It only excludes suicide in the first 2 years. Those of you saying it’s excluded may be right for much older policies and group policies and DI contracts, where it’s definitely excluded.

Tobias Moriset
Tobias Moriset

Its my pleasure. I love what I do.

Roxanne Tilton
Roxanne Tilton

it has always been an exclusion as far back as I can remember.

Kathleen Brown
Kathleen Brown

Tobias, thank you for your service

Chelsea Yuan
Chelsea Yuan

It is simple. Read the contract if you get one for yourself.

Alesta Sigorta Aracılık Hizmetleri
Alesta Sigorta Aracılık Hizmetleri

It is excluded,

Tobias Moriset
Tobias Moriset

Dan Tripp Yes I work for NYL not saying that other companies do not pay if death is an act of war. Just have not found any companies that do pay. I did not see your comment prior to my comment. When I first started working for NYL I asked about the war clause. Most of my warm market is Military and I know that as a member of the military I will not purchase Life Insurance if it has a war clause. If there isn’t a company out there that still has that war clause in its contract that… Read more »

Mohammed Naif
Mohammed Naif

i know that after two years no matter what the life policy must be paid but am not sure if will cover before that.

Dan Tripp CLU & Associates
Dan Tripp CLU & Associates

My Metlife contract does not have any exclusions other than for suicide within the first 2 years and misrepresentation. I’ve worked with all the major carriers, and to my knowledge, none of them exclude death by act of war in the individual market. Tobias, aren’t you captive at NYL?

Tobias Moriset
Tobias Moriset

You would have to read what the exclusion states. I know what SGLI pays and my company pays. I have yet to see a company that does other then those two.

Hugo Contreras
Hugo Contreras

Thank you Dan Tripp. Greta feedback. Nothing else to say.

Dan Tripp CLU & Associates
Dan Tripp CLU & Associates

There is no exclusion in a MetLife contract, nor most other contracts today, for “act of war”. The vast majority of contracts today have only 2 exclusions: death by suicide, but only during the policy’s incontestability period, and for material misrepresentation on the policy application, and even then, unless its a fraudulent misrepresentation, for the policy’s incontestability period. Death by acts of war, or in the commission of a felony or riot may still appear in some group contracts, but not in the individual marketplace.

Glenn Webb
Glenn Webb

Service members group life insurance will pay for active military. Most other insurance exclude this high risk category.

Aaron J.
Aaron J.

If you were previously deployed, but not currently will insurance company decline my application? If so, why is this the case? Since you mention that policy exclusions are not set in stone, in what situations do they tend to bend the rules?

LSM Insurance
LSM Insurance

Thanks – each insurance company has its own underwriting protocol. Further complex cases we always recommend having your broker submit a preliminary inquiry to the insurer. This is not a formal application, your name or personal info is not given. The offer is non binding but will give you a good idea if you will be approved.

Brian
Brian

I personally think it should, regardless to the cause, if anything is a danger to life then it should be covered by life insurance.

LSM Insurance
LSM Insurance

Brian, Thanks for sharing you thoughts. I would concur.