Know Types of Deaths Covered and Not Covered Under Term Insurance

Term insurance provides the financial stability to your family in your sudden absence. Your nominees receive the insurance benefits in case of an unforeseen event occurring during the policy duration.
Before you buy a term plan, you must know which types of deaths are included and excluded from the policy:
Death inclusions
- Natural causes
Your nominees will get the policy benefits in your absence that results due to natural causes or due to any medical ailment covered under the plan.
- Accident
An unfortunate incident occurring due to an accident is also covered under term insurance plans in India. However, some insurers may offer this as an additional. So, you must check the terms and conditions before making your decision.
- Pre-existing diseases (PEDs)
If your family files a claim in your absence resulting due to an existing medical condition, the insurer will accept the same. However, the claim may not be accepted if you had not disclosed about this PED at the time of purchasing the term insurance policy.
- Suicide
Most insurers do not cover such incidents under a term plan for a certain period from the date of commencement. However, your nominees will receive the policy benefits as per the terms and conditions if an adverse incident occurs due to suicide after the end of the specified waiting tenure.
Death exclusions
- Intoxication
If the tragic event occurs due to intoxication by either consuming alcohol or using drugs, the insurance company will not accept the claim filed by your nominees.
- Foreign country
Most term insurance policies are valid only in India. Therefore, if an unfortunate circumstance arises in a foreign country, insurance companies will not approve any claim filed by your nominees. In case you need to travel abroad for medical treatment, review the terms and conditions clearly, and keep your family members aware. In case your treatment is not successful, your nominees must be aware that any claim for the same will not be admissible as the incident occurred overseas.
- Hazardous activities
If an unfortunate circumstance arises while you are indulging in hazardous activities, such as sky diving, paragliding, or other similar adventure sports, your nominees will not receive the policy benefits.
- Homicide
In case the reason for the unforeseen event is found to be homicide during an investigation, the insurer will not accept any claim made by your nominees under the term plan. Additionally, if the circumstance arises as a result of an action taken by your nominee, the insurer will reject the claim.
- Terrorist attacks
If your absence results from a terrorist attack, the term plan will not cover this claim. It is advisable to be alert to mitigate the risks of such an incident although it may not be completely unavoidable.
- Natural disasters
A term policy will not cover an unfavorable circumstance arising due to natural disasters, such as floods, cloudbursts, or earthquakes.
- Withholding information
It is mandatory to provide all details about your income, occupation, health, and lifestyle at the time of buying the insurance policy. If you withhold relevant information, such as a pre-existing ailment or smoking, the insurer may reject any claim filed by your nominees in your absence during the policy duration.
- Certain ailments
Most insurance companies do not accept claims that arise due to sexually transmitted diseases (STDs), such as AIDS or HIV. It is recommended that you review the terms and conditions of the policy to clearly understand this clause.
Before making your decision, understand what is term insurance, its inclusions and exclusions, and other conditions. Read the policy document thoroughly to ensure that there are no surprises later. Moreover, your nominees must have complete knowledge of the terms and conditions to avoid disappointments in your absence.