What does life insurance cover?
What does life insurance cover? Life insurance ensures that any beneficiaries you name will receive a death benefit after your death occurs. Life insurance does cover death no matter what type of policy you have, but some policies vary with coverage depending on the nature of your death. Most life insurance policies have a suicide clause, and some life insurance companies may not cover deaths that occur while doing a high-risk activity.
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Chris Abrams
Licensed Life Insurance Agent
Chris is the founder of Abrams Insurance Solutions and Marcan Insurance, which provide personal financial analysis and planning services for families and small businesses across the U.S. His companies represent nearly 100 of the top-rated insurance companies. Chris has been a licensed life and health insurance agent since 2009 and has active insurance licenses in all 50 U.S. states and D.C. Chr...
Licensed Life Insurance Agent
UPDATED: Mar 19, 2025
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance provider and cannot guarantee quotes from any single provider. Our life insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance related. We update our site regularly, and all content is reviewed by life insurance experts.
UPDATED: Mar 19, 2025
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance provider and cannot guarantee quotes from any single provider. Our life insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Life insurance coverage varies depending on what type of policy you have
- Most life insurance policies have a suicide clause and don’t cover suicidal deaths that occur within the first 2 years of purchasing the policy
- Some life insurance companies may not cover your death if it occurs during a high-risk activity or during criminal activity
Life insurance allows you to be able to support your loved ones after your death.
In the event of your death, any beneficiaries you have named would receive a financial payout from your life insurance policy to help pay for things like funeral services and other end-of-life expenses. Although all life insurance policies offer a life insurance death benefit, coverage amounts will vary by policy and some policies may have certain restrictions on coverage.
So what does life insurance cover and what does life insurance not cover? And how does life insurance work?
In this article, we’ll go through everything life insurance covers and doesn’t cover so you can select a policy that best fits your needs.
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What does life insurance do?
Buying life insurance is a way you can help to ensure that your loved ones will be able to support themselves after your death. This is particularly important if you are the breadwinner and have a spouse or children that rely on you for income.
In the event of your death, the death benefit from your life insurance policy would be paid out to any life insurance beneficiaries you have named.
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What does life insurance cover and what doesn’t it cover?
Life insurance covers your death under most circumstances including illness, accidental death, death by natural causes, homicide, and in some cases, suicide. However, your life insurance provider may not pay a death benefit if you die in a way that is not covered.
If your death occurs while you’re committing a crime or engaging in a high-risk activity such as scuba diving or mountain climbing, your insurance company may not cover your death. To find out what types of death your policy covers and doesn’t cover, you’ll need to check with your insurance provider.
Some other things that can void your coverage are lying on your application and expired policies. If you lie on a life insurance application or your policy has expired, your insurance company will likely deny you coverage and your beneficiaries will not receive a death benefit.
Does life insurance cover suicide?
Whether or not your life insurance company will cover suicide largely depends on what kind of policy you have. For example, most life insurance policies have a suicide clause and do not cover suicide if it occurs within the first 2 years of buying the policy.
However, group life insurance does not have a suicide clause. Group life insurance usually covers suicidal death that occurs within the first two years of coverage.
Does life insurance cover medical bills?
Life insurance usually covers medical bills, although you may need to add certain riders onto your policy to be covered. You will also likely need to take a medical exam to qualify for coverage.
Most life insurance companies will also cover you if you are taking any medication. However, your rates may be higher than average depending on what you’re taking the medication for and how many medications you’re currently on.
Looking around at different life insurance companies and comparing rates can help you find a policy that will cover you and give you the most affordable rates.
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Does life insurance cover drug overdoses?
Some life insurance companies offer coverage for accidental drug overdoses. However, drug overdoses that are a result of a suicide attempt may or may not be covered depending on when the suicide occurs since most life insurance policies have a suicide clause.
If you are taking any medication, it’s important to check with your life insurance provider to see the level of coverage you have.
What kinds of expenses are covered by life insurance?
When you leave a death benefit to your beneficiaries, your beneficiaries can use the death benefit for anything they want to without restrictions. The most common expenses that beneficiaries are usually faced with after a policyholder’s death are end-of-life expenses, such as the cost of funeral services.
However, the death benefit can also cover things like medical bills, debts, rent, groceries, childcare, and any other expenses your beneficiaries need covered.
Case Studies: Utilizing Different Types of Life Insurance Coverage
Case Study 1: Term Life Insurance Policy
Sarah had a term life insurance policy with a coverage period of 20 years. Unfortunately, she passed away before the term expired. Her beneficiaries, her spouse and children, received the death benefit from the policy.
The payout provided financial support to cover funeral expenses, outstanding debts, and replace Sarah’s lost income. The term life insurance policy effectively protected her family during the specified coverage period.
Case Study 2: Whole Life Insurance Policy
John had a whole life insurance policy that he had been paying into for several decades. When he passed away, his beneficiaries, his children, received the death benefit from the policy. The payout helped cover funeral expenses, medical bills, and provided an inheritance for his children.
The cash value component of the whole life policy also allowed John to access funds during his lifetime to pay for medical treatments and supplement his retirement income.
Case Study 3: Universal Life Insurance Policy
Emily had a universal life insurance policy with a death benefit that would provide for her spouse and children in the event of her death. Unfortunately, she passed away unexpectedly in a car accident. The death benefit from the universal life policy helped cover funeral expenses, outstanding debts, and provided ongoing financial support for her family.
Additionally, the flexibility of the universal life policy allowed Emily to adjust the coverage and premium amounts over the years to meet her changing needs.
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The Bottom Line on What Life Insurance Covers
All life insurance companies cover death, but some insurance providers may not cover your death under some specific circumstances including during criminal activity or a high-risk activity. Most life insurance companies have a suicide clause which means that your suicidal death will not be covered if you die within the first 2 years of purchasing the policy.
Many life insurance companies cover medical bills, but you may need to add a special rider to your policy to qualify for coverage. Although many life insurance companies will cover you if you take medication, your rates will likely be higher than average.
To get the best rates, you should compare different life insurance companies before committing to a policy. Shopping around for affordable life insurance? Enter your ZIP code below to get free quotes from the top companies in your area.
Frequently Asked Questions
Will my life insurance policy payout if I die in a car accident?
Yes, life insurance policies generally cover death resulting from a car accident, as long as the death occurs within the policy’s coverage period and the accident was not a result of criminal activity.
Can I change my life insurance beneficiaries?
Yes, you can typically change your life insurance beneficiaries at any time. This can be done by submitting a beneficiary change form to your insurance provider. It’s important to keep your beneficiary designations up to date to ensure the intended individuals receive the death benefit.
Does life insurance cover terminal illnesses?
Some life insurance policies offer coverage for terminal illnesses through specific riders or accelerated death benefit options. These provisions allow policyholders to receive a portion of the death benefit while they are still alive if diagnosed with a qualifying terminal illness.
Can I purchase life insurance for my parents?
Yes, it’s possible to purchase life insurance for your parents, provided you have their consent and insurable interest. Insurable interest typically exists when you would experience financial loss in the event of their death, such as being responsible for their final expenses.
Can I convert my term life insurance policy into a permanent policy?
Many term life insurance policies offer conversion options, allowing policyholders to convert their term policy into a permanent policy without undergoing a new medical exam. This can be a convenient way to secure permanent coverage without requalifying based on health conditions.
What does life insurance cover?
Life insurance covers the death of the insured individual, ensuring that the beneficiaries named in the policy receive a death benefit. While all life insurance policies cover death, the specific coverage may vary depending on the policy type and circumstances of death. Some policies may have exclusions for deaths resulting from high-risk activities or suicide within a certain timeframe.
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Chris Abrams
Licensed Life Insurance Agent
Chris is the founder of Abrams Insurance Solutions and Marcan Insurance, which provide personal financial analysis and planning services for families and small businesses across the U.S. His companies represent nearly 100 of the top-rated insurance companies. Chris has been a licensed life and health insurance agent since 2009 and has active insurance licenses in all 50 U.S. states and D.C. Chr...
Licensed Life Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance related. We update our site regularly, and all content is reviewed by life insurance experts.