8 Death Cases That Term Insurance Does Not Cover

Death benefit is one of the key benefits offered under term insurance policy. Most policyholders remain under the perception that their term insurance will provide a lump sum death benefit to the nominee in the event of their unfortunate demise within the policy term. However, this is not always the case. It is important to understand that there are certain types of death that are not covered under life insurance policies. 

If you were looking forward to buying term insurance, understand that there will be a few exceptions that will remain uncovered in the case of death. 

8 Death Cases Uncovered Under Term Insurance 

The list includes:

• Murder of the Policyholder

  If the nominee is a criminal engaged in criminal activities, the insurance company will not settle the claim in the event of policyholder’s murder and investigations reveal nominee’s involvement in the same. Moreover, if the death of the policyholder occurs due to being involved in criminal activity, the insurance company will refrain from settling the claim. 

• Death Under Influence of Alcohol

  If the policyholder dies due to driving under the influence of alcohol or drugs, the insurance company will reject the claim. Moreover, if the policyholder hasn’t disclosed these habits, the insurance company will withhold the death benefit.

• Death Due to Childbirth

  If the policyholder dies due to pregnancy complications or childbirth, the insurance company will not pay the sum assured to the nominee. 

Also read: Difference Between Term Insurance And Money Back Plan    

• Death Due to Smoking-related Complications

  If you are a smoker, make sure you disclose the habit before your term insurance plan purchase. In case of non-disclosure of the smoking habit and death of the policyholder due to smoking-related complications, the insurance company will deny the claim.

• Death Due to Participation in Hazardous Activities

  Death due to participation in an adventure or hazardous activity is not covered under term insurance. Participation in adventure, risky activities like car and bike racing, paragliding, skydiving, parachuting and others must be disclosed while buying the policy. Not disclosing the same during policy purchase can result in denial of a claim in case of death due to participation in such risky activities.

• Death Due to Pre-existing Health Conditions

  Death due to any pre-existing condition present at the time of policy purchase will not be provided for by the insurance company. Death due to a pre-existing condition, unless covered by a rider, will not be settled. 

• Death Due to Natural Disaster

  If a policyholder dies due to a natural disaster like earthquake, hurricane, and others, the nominee will not get the claim from the insurance company. 

• Suicidal Death

  In case the policyholder commits suicide within 12 months of the policy term, death benefit will not be given to the nominee. Take note that many insurance companies provide cover for suicidal death from the second year onwards. 

That said, make sure you take all the above mentioned cases in account while buying the policy so that there is no confusion while filing the claim.

Must read: Benefit Of Purchasing Term Insurance Plans With High Sum Assured

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.