Term insurance plans are usually one of the preferred instruments for ensuring the financial protection of your loved ones even after you are gone. When you buy a term insurance plan, you can be rest assured that your loved ones are going to be taken care of financially, and their life goals will not be affected if you have planned well.
Term life insurance plans have long been considered the most convenient form of insurance plans owing to the relative simplicity of attaining one. As digitalization transforms every facet of our lives, term insurance policies can also be availed online. You can now easily avail an online term plans from most life insurance companies by filling all your details and submitting all your documents from the convenience of your home without having to step out. Online term plans go a step further in increasing convenience and people can actually avail policies in no time at all.
A term life insurance is one of the preferred protection instruments because not only does it offer compensation in form of sum assured to your beneficiaries in case of your death, but may also be customised to include additional protection in case you contract any critical illnesses or disability. There are several ways your term plan can be customised, and it is important for you to understand its different components to ensure that your loved ones are taken care of.
One of the foremost ways to assess your policy is to go through the term insurance terms and conditions, which are usually referred to as the fine print of the policy document. The term insurance terms and conditions explain the exclusions to the policy. This is the section of your online term plan where you can learn about what is not covered as part of the policy.
Common Exclusions in Term Insurance
Most term life insurance policies offer different kinds of customisation, based on the level of protection and coverage you are looking for. Even with the term insurance terms and conditions, there may be changes based on the individual policyholder.
These term insurance terms and conditions, otherwise referred to as exclusions, list out the situations under which your beneficiary’s claims will be rejected. While most will be customised in accordance with the insurer and the individual policyholder, there are several exclusions that remain common across most term life insurance policies.
Read on to learn about the common exclusions in term life insurance policies, which also form a part of your online term plan.
1. Suicide and/or Death due to hazardous activity
Cases of suicide are always listed as exclusions on term life insurance policies. In addition to this, cases where participation in dangerous activities may lead to death are also included in the exclusions. This could include adventurous sports that may commonly result in death, demonstrated by a previous track record of accidents.
2. Participation in Criminal Activities
This exclusion essentially states that if the policyholder’s death has been caused owing to their participation in criminal activities, their beneficiaries will not be able to claim term insurance benefits, i.e. the sum assured. This is quite a common exclusion and there are no add-ons that can offer protection to policyholders against this exclusion.
3. Pre-Existing Medical Conditions
Before you receive your policy, it is mandatory for you to reveal all the health conditions that you are suffering from or are likely to suffer from, owing to pre-existing conditions or even hereditary conditions. Your term insurance policy will always be drafted keeping in mind these conditions and it will affect your term insurance premium amount. However, if there is any pre-existing medical condition that was not revealed to the insurer before availing the policy, you will not receive coverage for it. This means that if you die of a pre-existing medical condition that the insurer did not know about, your beneficiaries will not be able to receive the death benefits.
4. Death under the influence of alcohol or drugs
Life insurance companies in India mostly refuse to provide term insurance cover to habitual drinkers and drug abusers. One cannot hide this claim from the insurer. Even if you hide your drinking problem and drug addiction, buy a term insurance plan, and die due to an accident or some other incident under the influence of drugs or alcohol, the insurance company may reject your life insurance claim as per the terms and conditions specified therein.
Conclusion
Term insurance terms and conditions may differ from insurer to insurer. It is important to study your policy document in detail to understand what the exclusions are in term insurance plan before you make the purchase.
