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Having life insurance is important especially if you are your family’s breadwinner. But it’s a confusing concept to wrap one’s head around with. Like any other contracts, many important items about your life insurance are often found in the fine print. And even when you think you’ve grasp the basics of it, it can still be embedded with many loopholes and restrictions that can trip you up.

1. You Lie, You Lose

Misrepresenting or not disclosing any information on your application may end up with a claim denial in the future. If you did not disclose your medical history or you falsified your age, income, occupation or any other information on your application, your insurers will deny your beneficiary’s claim. So, make sure you answer all questions correctly and honestly because even an innocent mistake can leave your beneficiaries in greater despair.

2. Suicide Clause

The suicide exclusion states that the insurance company won’t have to pay the death benefit if the insured commits suicide in the first 2 years of coverage. The most your beneficiaries would get is a refund of the premiums paid until the time of death. This clause protects the insurance company from people who buy insurance with the intent of committing suicide in order to provide a financial benefit to their beneficiaries.

3. Alcohol And Drug Use

This exclusion varies from company to company and may not be on every policy. This can be quite tricky because it can cover any cause of death that occurs while you’re under the influence of illegal drugs or alcohol, even if the cause of death has nothing to do with the drug or alcohol use. So, if you’re drunk and died because of a rouge asteroid, the insurance company can refuse to pay your death benefits.

4. Illegal Activity

This one is pretty straightforward. If you die while committing a crime or participating in an illegal activity, there will be no payout. There’s not much of a wiggle room with this exclusion as it can apply to all illegal activities and all causes of death. Say, you’re out for a ride and decided to take a shorter route across a private property without permission (trespassing) and had a heart attack, the life insurance company can refuse to pay your beneficiaries.

5. Dangerous Activity

What’s dangerous for one person may not seem dangerous to another. Since this is the case, insurance companies usually list activities they deem as dangerous. Such activities may include skydiving and car racing. However, you’ll still have the opportunity to get covered for an additional premium. So, if you’re an avid or professional car racer and want to be covered, you can pay for that protection.

6. Misstatement Of Age Claus

Intentionally misstating your age on your life insurance application can leave you with a denied claim. Even a few days, a few months or years older or younger, it’s still the same thing. So, feel free to lie about your age to that cute guy you met at the bar, but don’t do it on your life insurance application.

Life insurance can give your loved ones a financial safety net when you pass away. Though the market is swamped with life insurance policies, there are times that getting approved can be an uphill battle. Aside from your health conditions, here are five factors that insurance companies take into account that can affect your life insurance application.

1. You Are A Terrible Driver

Since most fatal wrecks are results of reckless driving, one of the things insurance companies might check out when you apply for a life insurance is your driving record. If your driving history is filled with fender benders, speeding violations, or more serious offences, then the insurer will see you as a bigger risk.

2. You Are A Thrill Seeker

Accidents can happen any time. If you have an adventurous outlook and a daredevil who likes to engage in dangerous hobbies such as sky-diving, rock climbing or white water rafting, you might have a hard time getting a life insurance policy. The riskier your lifestyle is, the more cautious the insurance company gets when it comes to extending your cover.

3. You Don’t Make A Lot Of Money

This may come as a surprise, but insurance companies might take into account the size of your paycheque. Depending on the insurer, you may have to prove that your income is above a certain threshold in order for the company to cover you.

4. You Regularly Travel Overseas

If you regularly travel abroad either for business or pleasure, such frequent getaways can make a life insurance company to put a stop on your application. Insurers designate risk levels to different countries based on the possibility that you’d acquire a serious illness while you’re there. So, staying in places labeled as “hot spots” for a long period of time may work against your application. It’s either you’ll end up paying higher premiums or you’ll be rejected.

5. You Mess Up The Application

Often when you’re applying for life insurance, you’ll have to answer a voluminous list of questions about your health and finances. Not telling the truth and stating wrong information can be grounds for a denial. Even if you unintentionally make a mistake, leaving out important information or guessing about something could get you a raised eyebrow. This is specially true with things such as your height and weight, because any inaccuracies will eventually show up on a medical exam. So, be as honest as you can be.