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Different Kind of Deaths that are Not Covered in a Term Insurance Plan

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  • 3rd May 2019
  • 4,527
Different Kind of Deaths that are Not Covered in a Term Insurance Plan

A term insurance plan is one of the most popular insurance policies in India. The premiums are relatively lower for a term plan and the return is higher because it only pays the money if the policyholder passes away before the duration of the term is over. Getting a term plan is important if you want to make sure that your family is financially safe even if you are not there to take care of them. For this reason, many single earners have started to buy term policies. You have a lot of flexibility in terms of tenure and premiums. However, before you sign up for a policy, it is important to know the rules and limitations of these policies.

The very first thing to know is what kinds of deaths are not covered in term insurance in order to ensure that your family’s insurance claim is not rejected. If something happens to you then dealing with a rejected insurance claim will be the last thing your family would like to deal with.

What kind of Deaths are not covered in Term Insurance?

Listed below are various types of deaths that are not included in your term plan.

1. Driving Under Influence (DUI)

DUI is one of the most common reasons for road accidents. Apart from endangering the lives of the drivers and the passengers, an accident due to DUI can cause many casualties on the road. A term insurance claim will be denied in case if an untoward event occurs by driving under the influence of alcohol or any form of narcotics. Always be careful about this and make sure your family and innocent people do not suffer because of your mistake.

2. No cover for death due to dangerous activities

If you are someone who is enthusiastic about adventure sports then you must know that your term plan will not cover death due to adventure activities. The list includes hiking, skydiving, bungee jumping, and other related activities. The term insurance also does not cover any death caused by vehicle racing as it increases the chance of accidental deaths.

3. Suicide

A very common question asked by policyholders is “does life insurance pay for suicidal death in India” and the answer is ‘no’. However, there are some regulations regarding this clause that every policyholder must know about. If the policyholder commits suicide within one year from the date of policy initiation, then the claim will be completely denied. If the policyholder commits suicide after one year then benefits are reimbursed. Some policy providers return the premium paid during that time. The amount is adjusted by subtracting applicable charges.

4. Pregnancy or childbirth

Pregnancy or childbirth-related death is excluded from the term plan. If the policyholder dies due to any medical issue that is related to pregnancy then the family will not receive the sum assured by the policy provider.

5. Pre-existing health condition

This exclusion is common for all the insurance policy providers. If the policyholder dies due to any health issue that was in existence before buying the policy then it will not be covered by the term plan.

Other than these, there are other excluded deaths from a term insurance policy. Some of these are death due to any Sexually Transmitted Disease (STD), death due to taking part in any unlawful activity, if the nominee murders the policyholders, and death by natural disasters. The latter can be covered if you buy a rider with your term plan.

- A Consumer Education Initiative series by Kotak Life


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