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Weird exclusions and what to do about them Russell Hutchinson highlights some of the strange exclusions within life insurance products and what action advisers can take with insurers.
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here are some very weird exclusions out there. In this consumer-focused age there is no reason merely to gloss over those and accept, with a shrug, that “the life insurance industry is strange like that”. We can challenge some of these ideas. Obviously, insurers can only be expected to insure events that are risks that have certain characteristics – they must be rare enough to be insurable, they must be sufficiently undesirable that the sum insured does not present a moral hazard to sane people, they must be uncertain, and in the future. 26 | ASSET 04 | 2021
I value the insurance industry and I think underwriting and appropriately pricing risks is important. But even so, we have some surprising exclusions.
Exclusion or eligibility criteria? Some of them are not really exclusions, they are really eligibility criteria which were moved from the application into the policy document in a misguided attempt to make application (usually by phone, online, or in a bank) easier. The result was just to make the contract confusing and make some claims a bit of a lottery. For example, found in several old credit
‘But if you were the unlucky recipient of blood products contaminated with HIV you probably have no idea within those timeframes’
