When it comes to securing the lives of your loved ones, you always want to provide them with the best. This also relates to ensuring a successful financial future for them in times of your absence. Purchasing a term insurance plan is one of the best ways to provide financial assistance to your family in the even of your death. This type of life insurance plans pays out the sum assured to your family members if you die anytime during the term of the policy. Even though term insurance plans are specifically designed to provide financial coverage to your family at all times, there are certain types of death that are excluded from the coverage. Read below to know all about the types of death that are covered and not covered under term insurance.
If the policyholder dies due to any health related issues, then this type of death is covered under term insurance. In case even if the death is caused due to any critical illness or medical condition, the nominee receives the death benefit along with rider benefit, if any.
Term insurance plans provide coverage if the death of the policyholder is caused due to an accident. Additionally, one can also purchase an accidental death benefit rider that pays out the extra sum assured along with the basic sum assured, in case of accidental demise. However, this coverage is not provided if the policyholder drives under the influence of drugs or alcohol. Term insurance also does not offer coverage to individuals involved in adventure sports activities such as parachuting, bungee jumping, etc.
If the policyholder commits suicide within 12 months from the policy date, the nominee is entitled to receive 80% of the sum assured. However, this differs from insurers to insurers and few companies may cover it suicidal death after a year while few may not provide any coverage for the same.
If the policyholder dies due to any type of sexually transmitted diseases such as HIV or aids, then no coverage is given to the nominee.
The insurance company rejects the claim if the policyholder dies due to any self inflicted injuries or involvement in any hazardous activity.
If death is caused due to drug or alcohol overdose, no coverage is given. The claim will be simply rejected and the nominee will not be eligible to receive any sum assured.
If nominee is found to be involved in the murder of the insured, claim can be rejected. Only after through investigation, if the nominee is not fund guilty, the claim will be settled.
If the cause of the death of the policyholder is due to any natural calamity, then no coverage is given.
Before opting for a term insurance plan, it is important you go through all the policy documents carefully and understand the inclusions and exclusions of the plan to ensure that your nominee’s claim is not rejected in your absence.
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