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Types of Death Covered in Term Insurance

Updated On Jul 09, 2021

The primary reason behind the purchase of a term insurance policy is its ability to provide an umbrella of financial security over the life assured’s loved ones after his/her death within the pre-decided policy duration. However, it must be noted that the death benefits are provided only under certain situations. The following article elaborates on such cases.  

Types of Death Covered in Term Insurance

The death-related situations which are surely covered under a term insurance policy are given below.

1. Death Due to a Medical Condition / Natural Death

A life assured’s death due to a medical condition, disease, or natural reasons is covered under term insurance policies. Suppose the life assured contracts dengue or malaria, which consequently results in his/her death. In this case, the beneficiary will be provided with the death benefits according to the term insurance plan. Moreover, the life assured can purchase an additional rider option of critical illness benefit, which will offer death benefits if the life assured dies due to severe disease like cancer, heart ailments, liver failure etc.

2. Accidental Death

As our life is full of uncertainties, one may never know what will happen the very next moment. Many people lose their lives in such sudden and unforeseen accidents. These include accidents involving motor vehicles, fire-related accidents, slipping in the bathroom, electric shock, work like accidents in factories or involving machinery at the place, accidentally falling from a building or rooftop, drowning in a river, etc. Hence, it is advisable to purchase a suitable life insurance policy to prepare for such situations. The death caused due to an unforeseen accident will be covered under the term insurance policy. Even if the life assured dies after 90 to 180 days of the accident, the insurance provider would have to pay the benefits. These death benefits can be used to pay for medical bills and accidental costs. Moreover, an additional accidental death benefit cover can be availed to get an additional sum assured.

3. Death-Related Cases That Are Not Covered in Term Insurance

Deaths in an accident due to intoxication of alcohol or a narcotic substance, adventure sports like parachuting, paragliding, skydiving, hiking, bungee jumping, scuba diving etc., homicide, childbirth, suicide (within initial 12 months of policy inception), war or terrorist attack and many more cases are not covered under term insurance policies. 

Take Away

It is advisable to read all the terms and conditions of the policy before purchasing the plan to find a suitable one according to your needs. Moreover, careful assessment of policy inclusions and exclusions can help devise a better, personalized policy plan whose possibility of claim rejection will be low. Furthermore, it is wise to compare different policy plans offered by various insurance providers as different companies have distinct rules and regulations for death benefits. You can even consult a credible financial advisor or an entrusted insurance agent to choose a reasonable plan according to your wants and wishes. 

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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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