Although term insurance plans are designed specifically to offer maximum insurance coverage to the nominee of the insured policyholder, there are certain types of death that are excluded from the term insurance policies. Here, are the types of deaths that are not covered in a term plan –
Death Due to Participating in Life Threatening Adventurous Activities
If the death of the insured is due to any adventurous sports like skydiving, parachuting, paragliding, rafting, bike and car racing, the insurer will not honor the claim. Since these life-threatening activities are self-inflicted, insurers exclude them from their list when it comes to securing the future of your loved ones in case of any casualty.
Smokers Need to Disclose Their Habit of Smoking
Whether you apply for an online term plan or through an agent, if you are a smoker, you need to disclose your habit of smoking, right when you are filling out the form. As insurers add an additional amount to the premium of smokers, concealing your smoking habits could lead to denial of your claim especially if the death is due to any smoking related complications.
It is therefore necessary that you go through the term insurance policy document carefully and have a complete familiarity of the exclusions and inclusions to prevent disappointment to your beneficiary during the settlement of the claim.
Death Due to Driving Under the Influence of Alcohol/Drugs
If cause of the policyholder death happens due to the influence of narcotic substances or alcohol while driving, then the insurer will reject the claim. It is therefore necessary that you go through the policy document very carefully and have a complete familiarity of the exclusions and inclusions of the term insurance to prevent any sort of disappointment to your beneficiary during the settlement of the claim.
Death Due to Terrorist Attacks and Natural Calamity
If the policyholder dies due to terrorist attacks, he/she may not get the death benefits under term insurance plans. Such claims might get settled on humanitarian grounds if the beneficiary contacts the IRDA but the clause is mostly excluded in most of the insurance companies.
Besides, deaths due to natural calamity like Tsunami/Earthquake too aren’t covered under this policy. Now that the casualty during natural calamities are very high and the claim to be settled are in millions and billions, it becomes almost impossible for any insurance company to pay all the beneficiaries at once. So, when you buy a term insurance, make sure you read the offer documents very carefully.
The insurance company will reject the claim if the police investigations reveal that the policyholder was murdered by the nominee. In case, the nominee’s name is involved in the murder of the policyholder, the insurance company will put the claim request on hold until and unless the nominee gets a clearance.
Death Due to Involvement in Any Type of Illegal Activity as per The Law of the Land
If the insured dies or is murdered due to his/her involvement in any criminal or illegal activity as defined by the law, the insurance company will reject the claim offer. In such cases, the insurer won’t be liable to pay any money to the beneficiary.
However, if the insured has a criminal record and is involved in criminal activities but dies due to any natural uncertainty that comes under the coverage plans then in that case the nominee will get the claim benefits.
Death Due to Child-Birth
If the policyholder dies due to child-birth or the complications of pregnancy, the insurance company will not pay any sum assured to her nominee.
So, before you purchase any term plan, make sure you go through all the policy documentation carefully. Having in-depth information of both, exclusions and inclusions can help you get the maximum coverage and avert any sort of discrepancy during the time of settlement of sum assured by the nominee.