Last Updated on February 27, 2020 by Gopal Gidwani

Life insurance products have been introduced in the market for the financial security of your loved ones. Whether it is a term policy or any other insurance product, it can financially protect your family after your demise. Term insurance can be a protection plan that can provide death benefits to your family after your death. Although a term policy can cover death, it might not provide a financial pay-out under specific conditions. Before you purchase a term policy for financial protection of your family members, let’s understand the types of death, which are included as well as excluded from term insurance.

1) Suicidal death
Suicidal deaths can be common in India. According to data, nearly 2.3 lakh Indians commit suicide every year. The rate of suicides can be high in India due to family problems, illness, and so forth. Under such a scenario, if a person happens to end his/her life within 12 months from the date of purchase of a term policy, the nominee/s can obtain 80% of the total premium amount in the case of a non-linked policy. Under linked plans, the beneficiaries can receive 100% of the total premium payment value.

2) Accidental death
The unpredictability of life can be high. Due to the growing uncertainty, there can be unfortunate events such as road accidents, collisions, and so on that can result in death. In the case of accidental death, a term insurance plan will pay the beneficiary against such causes. Additionally, you can also buy term insurance along with an accidental death rider wherein your loved ones can receive an additional sum assured value other than the regular term cover amount.

3) Natural death
As a person grows older, he/she might suffer from severe health conditions such as cardiovascular diseases, kidney failure, cancer, etc. Due to the severity of such illnesses, the chances of death might rise after a specific age. Under such a scenario, your family might suffer financially if anything happens to you in the future. Having a term policy can allow your loved ones to secure their future financially in your absence. With term insurance, your nominees can receive death benefits to maintain their current standard of living after your demise due to natural death.

While a term policy can cover death scenarios, there can be specific incidents that might not be covered under your term insurance. If you claim for a situation that is not covered under your term policy, your insurance company might reject your claims. Therefore, let’s go through the types of death that term insurance does not cover.

1) Self-inflicted diseases
Self-inflicted diseases can be when you cause a particular illness. Since you bring the hazardous health condition on yourself, term insurance might not offer coverage for self-inflicted diseases. Typically, many insurance companies might not cover you under the following circumstances mentioned below:
a) Alcohol or drug overdose
If your death occurs due to high consumption of alcohol or drugs, your nominees might not be eligible to obtain term insurance benefits from your insurer.

b) Homicide
If your nominee is involved in your murder, your insurer can directly reject the claim. Besides, your insurance provider might even put the claim approval on hold until and unless your nominee is free of all charges.

c) HIV/ AIDS
Sexually transmitted diseases such as HIV and AIDS are not covered under term insurance.

d) Natural calamities
Natural calamities such as earthquakes, tsunamis, hurricanes, and so forth can be unpredictable. You should read the policy terms and conditions to check under what circumstances the insurance company covers an individual during natural calamities. Some companies allow you to opt for a separate rider for coverage against natural calamities.

To sum up, you should go through the policy document carefully before purchasing the final term plan. Reading the policy document can help you understand the inclusions and exclusions in detail. That way, you can make informed decisions, which in turn can avoid any type of discrepancies at the time of claim approval.