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What Kind of Deaths are Not Covered in Term Insurance Plans?

Published On Jul 07, 2021

Term insurance policies provide death benefits to the beneficiary if the life assured passes within pre-decided policy tenure. It must be noted that the insurance provider is not liable to pay death benefits in certain situations which are not covered under the policy. However, many policyholders often ignore to read about such policy exclusions before purchasing the term insurance policy and the policy is rendered useless when the situation comes. Therefore, read on to learn about such cases to avoid the inconvenience of claim rejection. 

What Kind of Deaths are Not Covered in Term Insurance Plans?

Here is the list of death situations that are not covered in term insurance plans. 

1. Death by Suicide

The beneficiary would not be paid any death benefits if the life assured dies by suicide before completing the 1st year of the policy. However, many insurance providers offer death benefits according to specific terms and conditions if the life assured dies by suicide after the policy completion of the initial 12 months.

2. Death due to Intoxication 

The insurance providers often restrain from issuing a policy to alcoholics and drug addicts as they do not cover death due to accidents caused under the influence of alcohol or narcotic substances. 

3. Homicide

The nominee would not be entitled to any death benefits if it proved that the life assured was killed to obtain term insurance benefits. In this case, the payouts will be made if the court acquits the nominee. Moreover, the insurance provider can reject the nominee’s claim request if the life assured died due to his/her involvement in criminal activities. 

4. Death due to Adventurous Activities 

Accidental deaths due to adventurous activities like bungee jumping, parachuting, paragliding, skydiving, hiking etc., are not covered by the insurance providers as these activities pose higher risks of fatal accidents. 

5. Death due to Childbirth

If the life assured dies due to pregnancy complications or during childbirth, the nominee will not be provided with death benefits.

6. Death due to Natural Disaster

The insurance company does not cover death due to natural disasters and calamities like earthquake, tsunami, hurricane, cyclone, floods etc. 

7. Death due Pre-Existing Illness

Due to a pre-existing illness, death would not be compensated if the life assured hid it from the insurance provider during policy inception. Hence, It is advisable to disclose any pre-existing disease that the life assured has while filing the term insurance policy application form. Although this can increase the policy's premium rate, it will also ensure that your family will not suffer from claim rejections after your demise. Moreover, through proper disclosure of your illness, a suitable policy can be framed according to your medical condition and requirements. 

Take Away

It is advisable to read all the policy exclusions under your term insurance policy and purchase an appropriate plan according to your needs. You can even consult an insurance agent or a financial advisor to help make a more informed financial decision that will ensure your family's security after your demise. 

Also read - Life Insurance Claim Process: All You Need To Know

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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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