Types Of Death Covered And Not Covered In A Term Insurance Policy

Even though term insurance covers sudden deaths, there are some fatal accidents that fall under certain categories that are not covered by term insurance. The types of deaths that are and are not covered by term insurance policies are listed below:

Natural Deaths Or Deaths Caused By Health-related Problems

A term insurance policy covers natural deaths as well as deaths caused by health-related issues. If the policyholder dies as a result of a critical illness or medical condition, the beneficiary of the policy will receive the sum assured as a death benefit.

1. Death By Suicide

If the insured commits suicide during the first 12 months of the start date of the policy, the beneficiary is allowed to receive 80% of the premium paid if the insurance is not linked. In the case of linked plans, if the policyholder commits suicide during the first 12 months of the policy's start, the beneficiary of the policy receives 100% of the premium paid. The benefits of the policy will be nullified and the policy will be terminated if the policy holder commits suicide after the policy has been in effect for one year.

2. Accidental Death

Term plans also cover the death of the life assured in the case of an accident. Furthermore, many term plans have an additional accidental death benefit rider, which pays an additional sum assured to the beneficiary of the policy in addition to the basic sum assured in the case of the accidental death of the policyholder.

3. Self-inflicted Injuries

If the insured dies as a result of self-inflicted injuries or any hazardous activity, the beneficiary's claim will be rejected by the insurance company.

4. Intoxication

If the policyholder dies as a result of a drug or alcohol overdose, the insurance company will not give the beneficiary a death benefit.

5. Homicide

The insurance company will deny the claim if the insured is murdered by the beneficiary and the inquiry reveals the involvement of the nominee in the crime. The insurance company will put the claim request on hold until the beneficiary gets clearance.

6. Natural Disasters

In general, term insurance protects the family in the case that the life assured dies as a result of a natural disaster. The insurance company then pays the money assured to the nominee as a death benefit.