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  • What Causes Of Death Are Not Covered Under a Term Plan

    Life Insurance
    • Premiums as low as Rs.17/day for sum assured of Rs.1 crore*
    • Claim up to Rs. 1,50,000 deduction under section 80C**
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    Causes of Death Excluded from a Term Insurance Plan

    A life insurance policy provides protection to the family of the insured person in case of his/her unexpected demise. A term plan is a form of life insurance wherein the insured can take coverage for a specific term. This type of insurance pays only for the death of the insured within the policy term and there is no maturity benefit at the end. Both natural and accidental deaths within the policy period are covered by a term insurance plan. However, there are certain exclusions for which a term plan will not provide any compensation to the family of the insured.

    General exclusions of a term cover

    Here is a list of general exclusions for which the insurer is not liable to provide the death benefits. No compensation will be provided if:

    • The insured survives the policy term
    • There is any error in the claim application
    • The death occurs due to a pre-existing condition
    • The policy has lapsed due to non payment of premiums
    • The death occurs due to war or war-like activities
    • There is any misrepresentation or fraud at the time of signing up
    • The death occurs as a result of suicide
    • The death occurs due to sexually transmitted diseases
    • The death occurs as a result of drug or alcohol abuse
    • The death is caused during childbirth, pregnancy, or other related complications

    Exclusions from accidental death

    An accidental death is sufficient grounds to receive full compensation from the insurance company. However, there are certain exclusions applicable to accidental deaths too. If the accidental death of the insured happens due to any of the following reasons, the company is not liable to provide any compensation:

    • Driving under influence: If the insured was driving a vehicle under the influence of drugs or alcohol during a motor accident, the family will not get any compensation from the insurance company.
    • Participation in illegitimate activities: If the accidental death occurs while participating in an illegal activity with criminal intent, the claim can be rejected by the insurer.
    • Participation in hazardous activities: If the accidental death is a result of participation in extreme sports or hazardous activities, the insurer may reject the claim. Some of these activities include bungee jumping, skydiving, motor racing, rock climbing, etc.

    Death by homicide

    A life insurance company pays for death of the insured person resulting from murder. However, if the perpetrator happens to be the nominee, the insurance money will be withheld by the company. The idea here is to prevent any kind of unlawful activities to gain the insurance money from the company.

    Lifestyle-related ailments

    If the insured has smoking and drinking habits, it must be declared to the company beforehand while signing up for the policy. The premium amount for these individuals may be higher than that of others. In certain cases, the company may also reject the applications of these individuals if there are any pre-existing ailments as a result of these lifestyle-related habits. If the insured lies about these habits and dies as a result of them, the company has the right to deny the claim amount.

    Conclusion

    At the time of signing up for a policy, the insurance company will provide a detailed list of exclusions for which the claims can be rejected. It is the duty of the insured to read the policy document carefully and beware of the exclusions applicable. While most of these exclusions apply to almost all life insurers in the market, certain conditions may vary from one insurer to another. For instance, some insurers have adventure sports add-on to provide coverage for accidents occuring while participation in adventure sports. In a similar way, coverage may also be enhanced by subscribing to various add-on policies.