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Common Exclusions Under ULIPs

A ULIP is a form of contract which incorporates revenue and coverage protection within one program. A ULIP combines the creation of wealth with the future survival of your dear ones. ULIPs contribute to developing your wealth using traditional assets strategies while simultaneously offering full sum assured. As an outcome, purchasing a ULIP may give the perfect security against life's volatility. Based on your tolerance for risk, ULIPs permit you to engage either in the stocks or bond funds, with capital appreciation determined by the profitability of the financing.

Common Exclusions Under ULIPs

Below are a few common exclusions under ULIPs:

1. Exclusions From Accidental Death

The insurance company must compensate you in full if you die in an accident. Accidental fatalities, on the other hand, are subject to certain exclusions. The company is not obligated to give any compensation if the assured dies in an accident for any of the following reasons:

  • If the assured was driving a vehicle while under the influence of drugs or alcohol during a car accident, the family will not receive any compensation from the insurance provider.
  • Participation in unlawful activities: If the accidental fatality happens while engaging in illegal activity with the objective of committing a crime, the assurer may deny the claim.

2. Cosmetic Treatments

Cosmetic treatments are not covered by ULIPs, despite the fact that an increasing number of people are opting for them. Cosmetic operations such as plastic surgery that are medically indicated to address an accident or damage, on the other hand, will be covered.

3. Lifestyle-Related Ailments

If some policyholder smokes or drinks alcoholic drinks, the firm must be informed first before coverage is granted. Such people might well have higher insurance premiums than some others. In some cases, the corporation also may refuse these people's bids if they have any pre-existing medical issues as a byproduct of their personal decisions. The firm has the authority to refuse the reimbursement if the policyholder bluffs about his or her behaviors and is killed as a result of them.

4. Suicidal Death

The main purpose of offering suicidal death insurance was to assist emotionally bereaved family members by reimbursing them a portion of the premium paid by the deceased family member (as per the terms). Because the assured person's (policyholder's) motive for suicide could be debt, emotional suffering, or anything else, the loss falls heavily on the family members' shoulders, and any financial assistance is always welcome in such a scenario.

5. Participation In Criminal Activities

The limitation basically stipulates that when a client expires as a consequence of illegal conduct, their successors would be unable to obtain life healthcare coverage, i.e. the sum assured. This is a fairly typical restriction, and that there are no add-ons capable of protecting clients from it.

6. Pre-Existing Medical Conditions

Upon acquiring your insurance, you must reveal any and all medical issues that you have or are anticipated to have as a result of pre-existing conditions or even hereditary conditions. These criteria will always be considered when drafting your term insurance policy, and this will have an impact on the amount of your term insurance premium. However, you will not be covered if you have a pre-existing medical condition that was not disclosed to the assurer prior to purchasing the insurance. This means that if you die as a result of a pre-existing medical condition that your insurance was unaware of, your beneficiaries will be denied death benefits.


You have the freedom to choose the funds you choose with ULIP insurance. It is preferable to select fund solutions that will assist you in efficiently achieving your goal. While investing in stocks might help you grow your money over time, it also comes with a lot of risks. Debt funds, on the other hand, are safer and less susceptible to market fluctuations, but their returns are also safer and lower. As a result, you must first choose your aim before selecting a fund.

Do read - Are You Planning To Know Purchase ULIP? Know Everything About ULIPs

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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