Types of Deaths Covered and Not Covered Under Term Plans

The top-most priority when planning your future is to ensure that you have secured the financial future of your loved ones. Many insurance plans available in the market help you accomplish this objective. One such plan that is widely popular in India is the term insurance plan.

A term insurance plan is the most affordable life insurance product available in the market. Ideally, the policy offers death benefits to the beneficiaries in case of your untimely death. However, to make the plan more flexible, insurers offer rider benefits to enhance the coverage of the policy.

In the event of your (the insured) premature death during the policy tenure, the insurer will pay a lump sum benefit to the beneficiaries. But there are certain types of deaths that are not covered under the term insurance plan. In this section, we will be discussing the same.

Types of Deaths Not Covered under Term Insurance in India

The following are the types of deaths that term insurance plans do not cover –

Death due to suicide

Most term insurance plans do not cover the death of the insured due to suicide. The beneficiaries of the policy will receive no benefits in this situation. However, there are a few insurers in India that have certain clauses for death caused by suicide.

In case the insured dies by suicide in the initial 12 months of the policy, the beneficiaries of the plan will receive 80 percent of the premium paid (for non-linked policy). For policies that are linked plans, the beneficiaries will receive 100 percent of the premiums paid towards the term plan.

To ensure that your term insurance provider offers this facility, read the terms and conditions of the plan thoroughly. If you are confused about it, get in touch with your insurer and get a clarification on the same.

Death due to self-inflicting injuries

If the death of the insured is due to self-harm or participation in hazardous activities, the beneficiaries of the policy cannot avail the death benefits. The insurer has the liberty to reject any claims made towards the same.

Death due to HIV/AIDS

The insurer will not provide any death benefits to the beneficiaries of the policy if the insured dies due to HIV/AIDS or any other sexually transmitted disease. The claims made towards the same will be rejected as well.

Death due to intoxication

If the insured dies due to overdose of intoxicants such as alcohol or drugs, the nominees will not receive any death benefits.

Homicide murder

In case the insured is murdered by any of the beneficiaries, and the investigation reveals the same, the insurer has the right to reject the death claim made. The claim request raised by the beneficiaries will be put on hold by the insurer until the case is cleared.

Types of Deaths Covered under Term Insurance in India

The policy covers deaths caused due to any natural cause or health condition.
The policy covers the death of the insured caused in an accident. However, with the accidental death benefit, the beneficiaries of the policy will receive additional coverage over and above the death benefit.
The policy covers deaths due to natural calamities.

The Bottom Line

To secure the financial future of your loved ones, especially in your absence, you should choose the right term insurance plan. But before you do that, evaluate factors such as premiums with a term insurance calculator, coverage, exclusions, etc. Also, consider your current financial status, expenses, and future objectives. All this will help you make the right financial decision for yours and your family’s future.