What are the common exclusions under Unit Linked insurance plans?

Unit Linked Insurance Plans are a great way to build your corpus, they offer life cover along with an opportunity for the life assured to invest in any market linked fund option to grow his wealth for a financially secured future. This plan also provides a death benefit in case of your unfortunate demise during the policy term.

Before purchasing a unit-linked insurance plan you must go through the policy document to familiarise with the plan and know what is included under the unit-linked insurance plans. There are certains types of deaths and situations which are not covered under a unit-linked insurance plan. Below mentioned are some of the situations which are included under a unit-linked insurance plan.

Common Exclusions Under Unit-Linked Insurance Plans

Following are the aspects which are not included in a unit-linked insurance plan:

1. Pre-existing Medical Condition

In case the life assured has a pre-existing medical condition and passes away because of the pre-existing medical condition, the insurance company shall not provide the death benefit under such circumstances.Pre-existing medical conditions are not covered under unit-linked insurance plans.

2. Suicide

Since ULIPs are a type of life insurance plan, these plans do not include death due to suicide. In the life assured passes away due to commiting suicide within first 12 months from the date of the commencement of the policy, the insurance will provide 80% of the total premiums paid till the date of the death of the life assured.

3. Over Consumption of Drugs/Alcohol

If the life assured passes away due excess consumption of drugs or alcohol, this shall  not be covered under the unit-linked insurance policy. In case the life assured passes away due drugs/alcohol abuse, the insurance shall not provide a death benefit to the nominee under such circumstances. 

4. Contribution in Unlawful Activities

Participating in unlawful acts is a serious offense. If the life assured passes away because of contribution in unlawful activities, the insurance company will not provide the death benefit to the nominee, under such cases. 

5. Participation in Adventurous Activities

In case the life assured pases away while participating in dangerous activities such as skydiving or rock climbing, the insurance company will not provide death benefit to the nominee. If the life assured passes away while participating in dangerous activities which are considered risky, this shall not be covered under unit-linked insurance plans.

6. Self-inflicted Injuries

Since unit-linked insurance plans also offer life cover self inflicted injuries are not covered under the policy.

Conclusion

ULIPs can be used to grow your wealth for a financially secured future but there are some situations which are not covered under the policy and one may not be able to get a claim against those situations. Before purchasing a ULIP one must know what is not covered under the policy so that he/she is able to utilise their Unit-Linked Insurance Plans carefully. Above mentioned aspects may create an image of what type of scenarios are not covered under a unit-linked insurance plan.

Also read - Common features of Unit Linked insurance plans

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.