What does life insurance cover?

Life insurance is a way of helping your family cope financially when you die. The payout can be used to help your loved ones with everyday expenses when they can't rely on your salary or income any longer. So the question of what life insurance covers can be answered two ways: the expenses it covers, and the types of death it covers.

• Expenses covered by life insurance
  • Typically, life insurance policy proceeds are used to help cover expenses like home mortgages, funeral expenses, children’s college tuition, existing debt, child care or dependent care, medical bills, living expenses, cosigned debt, or any other expenses your loved ones may have. However, it’s ultimately up to your beneficiary (or beneficiaries) to decide how to use the policy proceeds.
• Types of death covered by life insurance
  • While each policy can be a little different, most life insurance policies cover deaths caused by accidents and natural illnesses. The majority of policies will not pay policy proceeds for a death resulting from suicide during the first two policy years. Also excluded are policies where statements have been falsified by the applicant as described in the incontestability provision of the policy (meaning they lied on the application). The incontestability period is regulated by state, but the typical timeframe is 2 years. Policy proceeds will not be paid if insurance fraud has been committed. Some policies may have additional limitations or exclusions related to the benefits paid, like death as a result of war, aviation, or certain avocation (policies administered by Ethos do not include these additional exclusions). Refer to your policy or ask your carrier if you have questions regarding limitations or exclusions specific to your policy.
• What does a policy administered by Ethos cover? When would claims not be paid?
  • Policy proceeds will be paid to your beneficiary at the time of claim if you have died for any reason except the following:
    • It has been determined that insurance fraud has been committed,
    • Questions within the application were not answered truthfully and are discovered during the two year contestable period, or
    • Your death is the result of suicide during the first two years of the policy being in force.