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What Kind Of Deaths Are Not Covered In Term Insurance

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Term insurance is considered as one of the most beneficial and affordable policy for Term insurance policy seekers. With low premiums, term insurance plans provide complete financial protection to the family of the demise. The nominee is entitled to get a lump sum amount on the policyholder’s death during the tenure.

Though the beneficiary is entitled to get the death benefit after the policyholder’s demise but there are few death events when the claim is denied. Read on to know the reasons for death, which are not covered under the Term Insurance.

Death on Accident:

Death on accident is caused by Term insurance policy however there are exceptions on few deaths by accidents. If the policyholder meets with an accident due to alcohol or drug influence, the Term insurance policy doesn’t cover the death.

Moreover, other death conditions due to involvement in any criminal activity or death due to participation in any sport adventure sport such as skydiving, bungee jumping, parasailing, parachuting etc. lead to rejection of death claim.

Few term plans have additional riders under which the death due to accident is covered. Here the beneficiary is entitled to get the extra sum assured along with the basic sum assured in case of accidental death.

Suicidal Death

Suicidal deaths are not covered by most of the Term Plans although few Term Insurance plans do cover Suicidal deaths under certain scenarios. The beneficiary is entitled to get 80% of the sum assured in case of non-linked term insurance policy, if the policyholder commits suicide within 12 months of policy commencement. If the Term Insurance is linked the beneficiary is entitled to get 100% of the sum assured if the policyholder commits a suicide within a year of policy commencement. The term insurance benefits nullify if the policyholder commits suicide after 12 months of the policy commencement.

Injuries due to self-infected disease:

The term insurance claim is rejected if the death of the policyholder occurs due to self-infected disease such as:

AIDS/HIV– In case the insured dies due to any sexually transmitted disease, then the claims for Term Insurance plans are rejected.

Intoxication – If the insured dies due to drug or alcohol overdose the insurance company denies the claim made towards the Term Insurance policy.

Other factors:

Homicide:

In case of the murder of the policyholder, the term insurance benefits stand invalid if the investigation reveals the involvement of the beneficiary or nominee in the murder. The beneficiary would have to wait for the assured term until the insurance company receives the beneficiary’s clearance.

Death due to Natural Calamity:

In case of the death of the insured because of a natural calamity, the family of the insured is entitled to get the death claim.

Claiming For Two More Term Insurance Policies:

The Insurance regulatory of India has few guidelines if the beneficiary claims for two or more policies. The nominee would have to submit the death certificate of the policyholder along with the proposal forms. After the completion of the verification, the beneficiary receives the assured sum.

Before zeroing in the term insurance policy, it is vital to know the policy’s exclusions and inclusions. Going through the policy terms and documents is mandatory to prevent rejection of claim in future.

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