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Common Exclusions Under Retirement Insurance Plans?

Updated On Jul 11, 2021

What Are Retirement Plan Exclusions?

Exclusions are situations or occurrences that, if they lead to the death of the policyholder, are not guaranteed by a Life Insurance policy. Consider the following scenario: suppose someone obtains a life insurance policy and thereafter commits suicide. In this case, the amount insured in the Life Insurance policy will be transferred to the nominee after the policyholder's death, according to the conditions of the policy. Suicide, on the other hand, is an exclusion in a Life Insurance policy, as are many other limitations. 

It is extremely recommended that you read the terms and conditions of your insurance before subscribing to it in order to avoid exclusions that might cause a problem in the future post your retirement. Retirement plans contain a slew of exclusions that are not covered by the insurance provider if the insured person dies or encounters an unforeseen situation as a result of the excluded factor. 

Common Exclusions Under Retirement Insurance Plans?

The insurance companies also want to run in profit and can’t keep on compensating people who go for risks and adventures which they know can be fatal for them and it is duly mentioned in the brochure of the companies but oftentimes the inclusions are so lucrative that the investors forget to see the exclusions. Read on to know about the common exclusions under retirement insurance plans.

  • Act of Suicide

The policy's protection cover will be immediately terminated if the insured person commits suicide around one year of the policy's enactment. When the policy expires, the company is only liable to pay the amount equivalent to the policyholder's premium(s). The company no longer pays interest, and the company takes a share of any expenses incurred by them.

  • Risky Adventure Sports

Elderly people quite often go on vacations to mountainside treks to enjoy their superannuation days, where they try thrilling rides such as paragliding, hill climbing, bungee jumping, and so on, which may not be appropriate for their age or medical problems, and if it results in a fatal accident, no financial benefits will be paid because they were already aware of the problems it could cause.

  • Drug Abuse

The companies have dismissed numerous reports for retirement benefits in cases of drug-related deaths. Drug abuse in this context refers to taking more prescriptions than prescribed by a doctor, which can lead to death or disease, among other things. Families may claim that this was caused by old age, but insurance companies may reject this claim. Similarly, mortality from an overdose of alcohol, for example, is included in the total and will not be provided for. 

  • Specific Illness History

If the policyholder dies as a result of a positive STD/HIV or prevailing illnesses such as cancer within five years of the starting date of the retirement insurance policy, the company will not give effective coverage. The specifics are included in the policy after it is signed and must be read carefully. 

  • Risks Related To Lifestyle

Before signing up for insurance, you will be asked about your smoking and drinking habits. According to insurance companies, smokers are significantly more likely than nonsmokers to die. To summarise, smokers are much more likely than nonsmokers to file a Life Insurance claim. As a result, they can charge smokers higher rates than nonsmokers, and they can even refuse claims if you die as a result of smoking.

  • Natural Disasters And Calamities

Natural disasters are beyond anyone's control, and it is obvious that a vast number of people are hurt, and the company cannot compensate everyone; thus, natural disasters are frequently deemed an Act of God and are excluded from insurance exclusions. This covers earthquakes, tsunamis, and other natural disasters.


It is vital to evaluate the terms and conditions of the contracts and insurance policies before acquiring a Life Insurance policy. Your family may suffer significant financial loss as a result of your untimely demise. A refused death lawsuit, on the other hand, can be absolutely disastrous. Examining the terms and conditions may require more work than normal. It is, nevertheless, crucial to understand what your insurance does and does not cover.

Also read 

How to Use Life Insurance for Retirement Planning?

Nearly 50 and Still No Retirement Planning Done?

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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