12 Important Types of Deaths Not Covered In a Term Plan

Types of deaths not covered under a Term Plan:

1. Death due to a natural disaster:

Many life insurance companies do not cover death caused by a natural disaster or act of God, such as a Tsunami, earthquake, flood, etc. If you stay in an area that is prone to a natural calamity, you can buy a rider by paying a slightly extra premium to ensure the death due to natural disaster is covered under your plan. However, some insurance companies provide this cover in their basic Term Plan. Therefore, it makes sense to check the list of inclusions and exclusions before buying the policy.

2. Death due to a terrorist attack:

The insurer can reject the claim if the policyholder's death is caused by a terrorist attack or any terrorist activity. Since most insurers do not cover the death caused by a terrorist attack, it is advisable to check for this cover before buying the policy.

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3. Death due to man-made calamities:

Man-made disasters, such as war, armed or unarmed truce, civil war rebellion, riots, strikes, military usurpation, invasion, etc, are not covered under life insurance. Hence, if the policyholder dies due to any man-made disaster, the insurer can reject the claim. However, some insurers offer cover under such situations.

4. Death due to intoxication:

The insurance company rejects the claim if the policyholder dies due to the consumption of alcohol or any form of the drug. Drug overdose and accidents under the influence of alcohol are common examples of death caused by intoxication. When buying the policy, you are required to disclose your history of alcohol and drug consumption and most insurers do not issue the policy to heavy drinkers and drug users.

5. Death due to participation in hazardous activities:

Activities like hiking, parachuting, paragliding, skydiving, bungee jumping, off-roaring, etc. are considered a threat to the policyholder's life. Hence, these activities are generally included in the list of exemptions, for which the insurance coverage is not offered. If you frequently participate in such activities, you are required to disclose it at the time of buying the Term Life Insurance Policy. Many insurers offer this cover as an add-on that can be purchased with the basic Term Plan.

6. Death due to suicide:

Although suicide had been on the list of exclusion of the insurers for a long time, nowadays, most insurance companies offer cover in case of suicide. However, the death benefit is offered to the nominee only if the suicidal death has taken place after a certain period. Most insurance companies offer the death benefit after a period of 1 or 2 years, depending on the insurance company's terms and conditions. If the policyholder commits suicide before that period, only the premiums paid by the policyholder are paid back to the nominee after deducting the applicable taxes.

7. Death due to homicide:

If there is no involvement of the nominee/s in the policyholder's murder, the death benefit is offered to the nominee/s. However, the insurer will not accept the claim if the nominee/s were involved in the policyholder's murder. In case of any allegations on the nominee/s, the payout is kept on hold until the murder charges are dropped.

8. Death due to participation in criminal activities:

If the policyholder's death is caused by his/her participation in criminal or illegal activities, the insurance company will reject the claim.

9. Death due to an undisclosed health condition:

When purchasing a life insurance policy, it is mandatory to disclose all the known health-related information in the proposal form. In case you forget or purposely hide any information related to your existing health conditions, the insurer can reject your claim.

10. Death due to critical or terminal illness:

Some Term Plans cover the death that occurred due to a critical illness, like cancer, heart attack, organ transplant, kidney failure, etc. However, the others may require you to buy a critical illness rider along with their basic Term Plan to ensure you get the critical illness cover. If your plan does not offer this cover, it is advisable to buy the related rider. Similarly, some terminal illnesses like HIV or any other sexually transmitted diseases are not covered under life insurance policies.

11. Death due to childbirth:

The life insurance policies do not offer cover if the death is caused by any pregnancy complications or childbirth.

12. Death outside the country:

If the policyholder's death occurs outside India, then it is not covered by Term Life Insurance. Therefore, it is advisable to avoid international visits if you are unwell. However, in case of an emergency or if the travel is unavoidable, it makes sense to cover yourself with a Travel Insurance Plan that provides life cover outside India.

To Conclude:

These are the common and important types of deaths that are generally not covered under the Term Life Insurance Plans or require you to buy separate add-ons or riders to ensure you get these covers in your plan. However, the insurer may or may not offer these covers depending on their terms and conditions. Therefore, before buying the Term Plan, it is advisable to carefully read the policy document, list of inclusions, list of exclusions, and policy exemptions, to make sure you make an informed decision.

Warm Regards,
Ketki Jadhav
Content Writer