Why do you buy a term insurance plan?
Ask this question, and the primary reason that would come to mind would be comprehensive coverage. Term plans cover death of the life insured during the policy tenure provided all due premiums are paid. They promise a guaranteed term insurance benefit that helps you secure your family’s finances in your absence. The plan gives you mental peace in the event of unfortunate incidents. But does the plan guarantee a death benefit in all types of deaths?
When it comes to the payment of death benefits, there is a fine print associated with it. The plan does not cover all types of deaths. Some deaths are excluded, and the claim would be rejected if you claim for them.
To avoid this rejection, let’s understand the types of deaths covered by term plans and those that are not.
Types of deaths covered:
The following are some common types of deaths that are covered by term insurance plans. However these are subject to policy terms and conditions –
1. Natural deaths
If the insured dies due to old age, some medical condition etc. it is considered to be a natural death. Such deaths are covered under the plan, and the sum assured is paid to the nominee.
2. Accidental deaths
Accidental deaths are unpredictable. Such deaths are covered under term plans from the first day of coverage.
3. Deaths due to natural disasters
Coverage would be available if the insured dies due to natural calamities like earthquakes, floods, tsunamis, hurricanes, etc. The sum assured amount would be paid to the nominee, as death benefit by the Insurance Company.
4. Deaths due to an illness
The term insurance policy will come to your family's rescue if death occurs due to health-related issues or a critical illness. It would cover such deaths and pay the death benefit subject to policy terms & conditions.
5. Suicides
In the case of suicides, there is a specific conditions under term insurance plans. Coverage would be available if the insured dies from suicide after 12 months of buying a new policy or reviving a lapsed one. The death benefit would be paid in case of such suicides. However, this varies from plan to plan and also among the various life insurance companies as certain companies may or may not provide coverage for suicidal death.
For death due to suicide within 12 months of buying or reinstatement of a life insurance plan, death benefit is not provided to the nominee in most of the cases.
Moreover, it is always important to read policy terms & conditions and know the inclusions & exclusions of the policy before purchasing it.
Types of deaths not covered
While the aforementioned types of deaths are covered under term plans, some of the below mentioned ones are excluded –
1. Suicides within a year
As mentioned earlier, suicides have a specific condition under term insurance plans. If the insured commits suicide within 12 months of buying the policy, such a death would not be covered. In this case, the premium paid would be refunded back after applicable deductions, and the policy would be terminated.
Similarly, the death benefit would not be paid if the insured has revived a lapsed term plan and then commits suicide within 12 months of such revival.
2. Death when you are under the influence of intoxicants
If the insured is under the influence of alcohol, drugs, or any other intoxicating substance and then death occurs due to such an influence, the death would not be covered under the policy. Similarly, coverage would not be allowed if the insured is addicted to intoxicating substances and dies of the medical complications of such an addiction.
3. Death due to HIV/AIDS
HIV/AIDS is not covered under term insurance plans. So, if the insured suffers from HIV/AIDS and succumbs to the illness, the death benefit might not be paid. However, some plans do cover this as well, and it’s important to check with your insurer before purchasing the plan about the specific details.
4. Death due to an illness that you hid from the insurer
Term plans require you to disclose your medical health and past history truthfully. If you hide this material information, it is considered a breach of good faith. If the health or medical illness gets complicated and the insured dies due to the same, such a death would not be covered.
5. Homicides
Though homicides are covered, there are instances when such deaths would be excluded. If the insurer finds out that the nominee or the beneficiary was involved in the murder or if the murder was done to acquire the insurance payout, the insurance company will reject the claim. In such cases, the death benefit would not be paid.
So, before you purchase your term insurance plan, know which deaths would be covered and which won’t by ensuring you have read the policy terms & conditions properly. This would help you avoid claim rejections and get the term insurance benefits when it is most required.
BJAZ-WEB-EC-01614/22
An ISO 9001:2015 
