What Causes Of Death Are Not Covered Under A Life Insurance Plan

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Life insurance plans provide a risk cover against death on the life of the policyholder during the policy term. Thus, if the policyholder were to succumb to an untimely death during the policy term, the insurance provider will pay a death benefit to the nominee. The death benefit, in most cases, will be equal to the sum assured opted for by the policyholder at the time of purchasing the policy with the addition of any bonuses that may be payable under a plan. Thus, life insurance plans are a must if you want to ensure that your dependents are financially secure in case of an untimely eventuality.

That being said, life insurance plans also have certain exclusions. If the policyholder has passed away due to an event that is mentioned in the insurance provider’s exclusion criteria, no death benefit will be paid to the nominee. Thus, it is necessary to familiarise yourself with the policy’s terms and conditions, inclusions, and exclusions before purchasing a plan.

Common types of events/deaths that are not covered by life insurance plans

• Suicide or death due to self-inflicted injuries: Life insurance plans usually do not cover suicide or death caused due to a self-inflicted injury. However, most life insurance providers will return a certain percentage of the premium paid by the policyholder if the concerned individual commits suicide during the policy term.
• Death due to alcohol intoxication or use of narcotics: If the policyholder passes away due to consumption of excess alcohol or drugs, the insurance company cannot be held liable to pay the death benefit to the nominee. In such a case, the death claim, if raised, will be rejected by the insurer.
• Death due to HIV or STDs: Most insurance providers do not cover death that occurs as a result of the policyholder being infected with HIV/AIDS or a sexually transmitted disease (STD).
• Death due to adventure sports: Most life insurance policies, unless otherwise mentioned in the policy brochure, do not cover death as a result of the policyholder partaking in adventure sports, since the concerned individual is usually well aware of the risks of participating in such a sport. Certain examples of adventure sports include bungee jumping, motorbike racing, rock climbing, skydiving, etc. Certain life insurance policies also don’t provide life coverage to individuals flying in private aircrafts.
• Death caused when partaking in criminal/illegal activities: If the policyholder succumbs to an untimely death while partaking in a criminal activity or while carrying out any activity with a criminal intent, no death benefit will be paid to the nominee.

*Note: This is a general list of exclusions and is not exhaustive. The exclusions mentioned above need not be applicable to all life insurance policies.

Life insurance policies usually provide coverage for events that are unintentional, accidental, or unplanned. Thus, if you have a life insurance policy, you should first make sure to read through the exclusions mentioned in the policy brochure in order to know the limits of your policy’s coverage. Also, make sure to keep your policy in force by paying the due premium as per your premium payment schedule, since this will ensure that your policy doesn’t lapse and stop providing you coverage. Lastly, it is vital that you take your nominee through the claims process and inform them about the exclusions and inclusions of the policy in order to ensure that they don’t face any undue hassles when filing the claim.