• 14th June 2021

Know What Kind of Deaths Are Not Covered Under Term Insurance

Life does not come with any guarantee. Nobody knows what the future holds. Besides this, life has become more uncertain than ever before. The widespread of the deadly coronavirus, the hectic work-life, unhealthy eating habits, and wrong lifestyle choices have made life unpredictable. Therefore, the need and demand for life insurance plans have increased significantly. 

If you are planning to invest in life insurance, you will come across numerous options that can make your task daunting. However, it is advisable to invest in term insurance plans, as they have many advantages. Let us understand what is term plan and how it can be beneficial for you.  

Term insurance is a pure life protection plan that provides life cover to the policyholder for a specific tenure in exchange for a premium. Term plans are significantly popular, as they offer a high sum assured at a pocket-friendly premium. They are one of the best tools with which you can ensure the financial security of your dear ones once you are no longer around. 

A term policy is an integral part of your investment portfolio. So, if you are planning to purchase a term plan, understand its inclusions and exclusions. It is essential to know about the types of deaths included and excluded from a term policy. If you do not have any idea about them, the purpose of investing in a term policy is lost.

Here, we explain the forms of deaths, which a term policy does not cover.

  • Death due to any pre-existing medical condition

If the insurer finds out that the policyholder’s death was due to any pre-existing medical ailment that he or she hid from the insurer while applying for the policy, the nominee will not receive any death benefit. Therefore, it becomes necessary to disclose all your pre-existing medical conditions so that there is no dispute during the claim process. 

  • Death due to participation in adventurous activities 

Term policies do not cover any death that occurs if the insured dies due to involvement in adventurous sports. It is because activities like parasailing, paragliding, bungee jumping, sky diving, and scuba diving are dangerous. If you are participating in such activities, you are doing it intentionally. 

  • Non-disclosure of smoking habits

While filling the application of a term plan, it is necessary to intimate the insurer whether you are a smoker or not. The insurer can deny the claim if the policyholder developed medical conditions due to smoking, which eventually led to his or her demise. Many policyholders do not inform the insurer about their smoking habits to save on the term insurance premium. However, this approach is wrong, as the family’s financial stability is at stake. So, it is advisable to inform the insurer about the smoking habit well in advance. 

  • Death due to alcoholism and drug intake

Insurance companies do not provide coverage for deaths due to alcoholism and the consumption of drugs. They also do not support accidental deaths to the consumption of alcohol and substances. In such cases, the insurer can reject the death claim made by the policy’s nominee.  

  • Death due to natural calamities 

Insurers deny death claims in connection with calamities like tsunami, earthquakes, and cyclones. 

Apart from these, if the policyholder is murdered or passed away due to involvement in any criminal activity, the insurer can dismiss the claim. 

The primary purpose of investing in a term policy is to ensure the economic security of your loved ones. Compare different policies online and pay the term insurance premium for the most suitable plan. Ensure that you are aware of the various terms and conditions of the policy.

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