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Common Exclusions Under Endowment Policies

Updated On Sep 10, 2021

Exclusions will be included in most life insurance policies. While it is critical to appreciate the benefits, it is equally critical to comprehend the exclusions. Keep in mind that most plans do not cover death as a result of terrorist attacks. When choosing a plan, make sure it covers the majority of the key risks and has the fewest exclusions possible. A life insurance policy's exclusions are usually specified plainly. Inquire about the exclusions while purchasing a policy. It is essential that you read the fine print for maximum clarity. If you don't follow these steps, your claim may be denied. The exclusions are especially significant if you're thinking about purchasing critical illness insurance.

Common Exclusions Under Endowment Plans

The following are examples of common endowment plan exclusions:

  • Suicide Exclusion

Suicide deaths are rarely covered by insurance policies, however, depending on the plan, the policyholder's nominee or beneficiary may be entitled to at least 80% of the total premiums paid up to the date of death, assuming the policy is still active. Depending on the insurance, this information could differ. When a person commits suicide, death benefits may or may not be available. Before signing up for the policy, it is critical that you are familiar with the details.

  • Taking Part In Riots And Civil Upheavals

Deaths that occur as a result of participation in any illegal activity, such as a riot, or mishaps that occur as a result of participation in illegal activities will not be covered by the policy because doing so would encourage discontent in society and make them complicit.

  • Drug And Alcohol Abuse Results In The Death

Death caused by opioids or any other substance is not deemed natural; instead, it shows foul play because it might be self-inflicted and pre-determined, and so is not an accident. However, use on the advice of a medical professional is an exception.

  • Cases of Life-Threatening Activity Participation

Any form of race activity or other risky activity might result in death due to an accident. Intentionally engaging in a life-threatening activity will not be reimbursed by the insurance company for the purpose of boosting the client's overall well-being.

  • Pre-Existing Disease

Death as a result of a pre-existing condition will not be covered by insurance since it incorrectly rigs the odds of receiving insurance benefits because the outcome is predicted.

  • Providing Misinformation

When purchasing an endowment plan, it is necessary to supply precise data. Any inconsistencies discovered by the assurer may result in the policy being canceled, along with all benefits.


When buying an endowment plan, one hopes to safeguard their future and make preparations so that they will not be shaken when rough waters arrive. As a result, it is critical for both the client and the service provider to be aware of the existing endowment plan restrictions, as these exclusions are in place to promote the well-being of their clients.

To avoid the disappointment that comes with a claim denial during a time of grief and need, it is recommended that the client reads the terms and conditions so that you may determine for yourself and are completely informed of how and when your chosen endowment plan will extinguish.

Also read: Types Of Endowment Policies You Can Invest In

How Can I Calculate Surrender Value For My Endowment Policy?

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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