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Sep. 25, 2007
I was told that if a war were to start, people would not be able to buy life insurance anymore. I am primarily concerned about mortgage life insurance. If a war starts will I still be able to purchase mortgage insurance? Even if there is a draft put into effect?
Christal, Massachusetts
Life insurance companies do not close their doors to new business, even in times of war, so you should be able to buy life insurance or mortgage life insurance in the event of a war or a reinstatement of the draft.
According to Jack Dolan, a spokesperson for the American Council of Life Insurers, there may be a lot of fear-mongering going on, but there is really no cause for you to be concerned.
The only thing that might be likely to change for life insurance policies in the event of a war would be that new life insurance policies could include an exclusion that would absolve the insurance company from paying the death benefit if the policyholder died due to an act of war, but it would not stop insurers from selling life or mortgage life insurance, says Dolan.
The only time this would cause a problem is if someone bought a home, the mortgage insurance included an act-of-war exclusion, and then that person either enlisted or was drafted to fight in a war and was killed.
According to Dolan, this is unlikely to happen because the prime candidates for military service — people between 18 and 25 years old — generally don't own homes. Even if these circumstances came about, and the home- and policyowner died in the conflict, the life insurance provided to servicemen by the military would likely be enough for his beneficiaries to pay off the mortgage.
For more information, read Will the terrorist attacks affect your insurance policies?
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Disclaimer: We are journalists, not financial planners or insurance brokers. Nothing we say should be interpreted as a recommendation to buy or sell any insurance product, or to provide other financial or legal advice.
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