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What type of deaths are not covered in term insurance plan? | FAQ #22
Nov 08, 2017 | 125 VIEWS
This applies to not just term insurance but any type of life insurance plan.

When buying a term insurance with a large cover you want to be absolutely sure that in case something happens to you, your family members will receive the claim amount for sure. Hence this question, I suppose…

Well, ALL types of death are covered in term insurance. A normal human being need not be too worried at all thinking about this.

So while all types of death are covered, there are a few (yes, just a few exceptions). They are as follows:

Suicide - Most insurance companies cover suicide too, but only after a year. In case, the policyholder commits suicide within a year, the benefits are not paid out - only the premiums paid are returned. However, if the policyholder commits suicide after a year of taking the policy, the cover amount is paid to the nominee.

Death due to any sort of illegal activity - You are not supposed to drink and drive. And if you do and meet with an accident which results in death, the cover will not be honoured. The drunk driving is just an example of doing something illegal - any other kind of illegal activity which results in death can result in the claim not being honoured.

This covers most of the life insurance plans in the market. However, it is possible that some plans may have some more exclusions. It would be worthwhile to spend some 15 minutes reading the policy document once you receive it. Yes, I know it’s fine print, in small font, running into multiple pages - but please, please go through them. Just to be sure. In case of a problem, use the free-look period to cancel your plan. Your money will be returned to you.

Have any questions on this? Just drop a comment and we will get back to you.

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