Term insurance plan covers the life in a very efficient way. If there is a risk of death, the lump sum will be paid to the nominee. However, certain kinds of deaths are not covered by the term plan in India. You should be aware of the terms and conditions of the insurance policy so that there will not be an unpleasant surprise to your family members or dependents upon your death.

The following deaths are not covered in a term insurance plan:

• Death due to driving under the influence of alcohol
• Accidental death due to the driving under the influence of drugs
• Death due to the participation in racing events (car racing and bike racing)
• Death due to the participation in adventure activities (hiking, water sports, trekking, etc.)
• Death due to pregnancy and childbirth
• Death due to the pre-existing health condition
• Death caused due to the participation in illegal activities (as per the law of the land)

Exclusions under the term life insurance plan

There are certain exclusions which come under the lifestyle category.  If you have smoking habit, it should be mentioned in the policy. The insurance company will charge additional premium to assess the risk of death due to smoking. Chain smokers will pose great risk to insurance companies. If you conceal the information about your smoking habits, the insurance company may reject your claim. If you abuse your body in any other way which leads to self destruction, the policy claim may be rejected by the insurance company.

♦ Suicide–No term insurance plan will accept the claim due to suicide. It is placed under the exclusion list under the group insurance plan as well. In some cases, the insurance company will pay all the premiums paid by the policyholder until the date of death after deducting policy-related expenses.  The policies that are issued before January 1, 2014 will implement the old death clause. The new clause will be applicable for policies that are issued after the January 1, 2014.  As per the new regulations, the policy will be null and void if the suicide takes place within one year after the subscription of the policy.

♦ Self-inflicted injury –If the death takes place due to self-inflicted injury or hazardous adventurous activity, the claim will be rejected by the insurance company.

♦  HIV/AIDS – the claim will not be admissible by the insurance company if the death takes place due to sexually transmitted diseases such as HIV or AIDS.

♦ Intoxication – If the death takes place due to the consumption of alcohol or drugs, the insurance company can reject the claim.

♦ Homicide –If the policyholder dies due to the murder committed by the nominee, the insurance company will reject the claim. If the investigation takes place, the insurance company will put the claim on hold until the acquittal of the nominee.

♦ Tsunami – The deaths that take place due to tsunami and other natural disasters will not be covered by the life insurance company unless the policyholder goes for additional rider.

Change in lifestyle

If there is change in lifestyle after the subscription of the life insurance policy, the policyholder is not under the obligation to share the information. If you are addicted to smoking after buying the policy, the insurance coverage applies and the insurance company should process the claim without any issues. If there are any issues in claiming the policy, you can approach the grievances cell of the insurance company or IRDAI directly.

Claiming more than two policies

If you are claiming more than two life insurance policies, you should follow the steps as per the IRDAI regulations. As a matter of fact, you should submit the existence of another life insurance plan while subscribing to a new life insurance product. The information should be shared in the proposal form. The ‘death certificate’ will be presented to the insurance company which has the longest association with the insurance company.

The claim process will be informed by other companies and an acknowledgment will be shared with other insurance companies as well. The information provided by the first company will be accepted by other companies. As a matter of fact, the insurance company will not ask for the original death certificate as per the latest practices. Hence, you should provide complete information about your previous insurance company.

A Final Word

Before buying a life insurance plan, you should go through the documentation. If you are aware of the features and benefits, you can sign the contract with the insurance provider so that there will not be any issues in claiming the insurance policy. Certain Deaths are Not Covered in a Term Insurance Plan. Hence, you should understand the exclusions and should settle for the most appropriate plan as per your needs.