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Common Exclusions Under An Endowment Plan

Published On Sep 22, 2021 10:00 AM By InsuranceDekho

When the policyholder pays the premium and an assured event occurs during the term of the contract, the insurance contract promises to pay out the sum assured. Insurance firms, on the other hand, discuss exclusions in the coverage they provide in order to limit losses. Exclusions are events or circumstances that the insurance coverage does not cover. Let's consider the example from actual life. An individual may decide to purchase a life insurance policy and subsequently commit suicide. The sum pledged will be paid out to the candidate in the case of the policyholder's death. On the other hand, suicide is not covered by insurance. All life insurance firms refuse to pay out the sum assured if a person commits suicide within the first year of the policy term.

Common Exclusions Under An Endowment Plan

Below are a few common exclusions under an Endowment Plan:

1. Exclusionary Suicide

Despite insurance plans rarely cover suicide burials, if the coverage is still active, the policyholder's selection or successor may be entitled to collect up to 80% of total insurance premiums up to the time of death. This information may vary depending on the insurance. Death benefits may or may not be available if a person commits suicide. It is vital that you understand the details of the policy before registering for it.

2. Civil Disobedience And Riots

Because it would increase resentment in society to make people culpable, deaths that occur as a consequence of participation in any criminal activity, such as a riot, or mishaps that occur as a result of engagement in illegal activities will not be covered by the policy.

3. Usage Of Drugs And Alcohol Resulting To Death

Mortality from opioids or any other narcotic is not considered natural; rather, it indicates improper conduct because it might be self-inflicted and pre-determined, and so is not an accident. The exception is when used on the advice of a medical professional.

4. Addiction To Drugs Leads To Death

Death from opioids or any other narcotic is not considered natural; rather, it indicates foul play because it could be conscience and pre-determined, and so is not an accident. The exception is when used on the advice of a healthcare practitioner.

5. Cases of Life-Threatening Activity Participation

Any type of race or other high-risk activity can prove fatal as a result of an accident. Intentionally engaging in a life-threatening activity for the goal of improving the client's overall well-being will not be covered by the insurance provider.

6. Existing Illness

A word describing a disorder that already exists is "pre-existing disease."
Because mortality as a consequence of a pre-existing ailment inaccurately affects the probabilities of receiving insurance benefits because the consequence is foreseeable, it will not be covered by insurance.

7. Inaccurate Information

It is vital to provide exact details when acquiring an endowment plan. If the assurer discovers any irregularities, the policy, as well as its benefits, may be canceled.


When obtaining an endowment plan, one desires to secure their legacy and create plans to ensure that one will not be swayed when the going gets tough. As a result, both the consumer and the provider must be informed of the current limitations in the endowment plan, which are designed to safeguard their clients' well-being. To minimize the sorrow of a claim refusal during a time of loss and need, it is highly suggested to study the terms and conditions so that you may determine how and when your selected endowment plan will assist you.

Also read - How Are Endowment Useful For Retirement Planning?

Planning To Buy An Endowment Policy? Here's What You Need To Know About It

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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