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Terms and Conditions for Life Insurance Riders

Updated On Jul 17, 2021

Life Insurance Riders are the preferred choice for Insurance Policy holders to increase the coverage of their plan and to give their family members financial safety even in adversities. However, as life in the present period is so unpredictable, it is only dangerous that you do not plan for your loved ones' financial support, therefore it takes a long-term plan with a large amount. The benefits provided by the insurance upon any mishap thereby assist the lifestyle of your family and plan a better future. However, terms have to fulfil certain restrictions; failure to adhere to these conditions will cause insurance claims to be rejected.

Terms and Conditions of Term Insurance

With so many varied and situation specific insurance plans riders available in the market, the terms and condition of each insurer will vary, but some requirements are consistent among every insurance firm, which have been mentioned below:

  • Maturity Benefits

It should be noted that many life insurance riders provide no maturity benefits in case the policyholder survives beyond the maturity period. However some specific riders might pay it as well but maturity benefits in riders is not much in trend therefore the list of inclusions and exclusions along with the terms and conditions should be read by the purchaser.

  • Free Look Period

The terms and conditions of the policy shall be understood to be 15 or 30 days (if purchased online) free of charge from the day the insurance paper is received. You may choose to return a policy during the free time period that provides the grounds for not accepting the terms and can receive a reimbursement of the premium paid.

  • Suicide Exclusion

Suicide death is usually on the list of exclusion plans, however some insurers restore the premiums paid if their policyholder committed suicide during the first year of the policy term.

  • Lifestyle Condition Exclusions

Each life insurer highlights some frequent conditions of lifestyle, such as smoking, tobacco consumption, being overweight etc. For example, a term plan premium is different to a smoker and is, as a result of the risk associated with smoking, in most circumstances more than the term plan for a non-smoker. Consequently, any death from these actions by the policyholder is designated as excluded and the approval of the claim is problematic.

  • Pre-Existing Medical Condition Which Were Not Informed To The Insurer

Death that was caused by any serious medical condition that was not revealed by registration in the application is covered by the list of exclusion. In such a situation, the insurer will also dismiss the claim application submitted by the candidate for concealing facts about the health status of the policyholder. Therefore, it is necessary that you disclose the prior health conditions to the insurance company. 

  • Death Due To Drug Abuse 

If the insured individual was influenced by medicines, alcoholic beverages, narcotics or a psychotropic substance, the insured person could be called death by poisoning and is excluded from the term plan rider cover. In such circumstances no death benefit is paid, which results in a claim refusal. Hence, the insured should try to stay away from drug abuse and/or overdose that leads to fatality. 

  • Death From Participating In Criminal Activities

If the insurance company finds that the insured person was involved in any sort of criminal conduct or in any offence that violates the code of legislation and led to the person's death, the policyholder's nominee shall not receive a death benefit as it is excluded.

 Endnotes 

By taking the Life Insurance Rider’s terms & conditions lightly and ignoring them, You are endangering and challenging your life to pursue a claim for your nominee or dependents after your death. Before you decide to buy that term plan, you should spend extra time reading the policy paper and illustrations and evaluate the requirements.

Also read 

All About Riders in Term Insurance Plans

How Do Riders Work In Term Insurance?

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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