The uncertainty and unpredictable nature of the deadly Coronavirus (COVID-19) has made people realize the need to buy a life insurance plan. Different types of life insurance policies are available in the market. However, a term plan is the most suitable type of life insurance policy, as it provides you with a high sum assured at a nominal premium. 

Term insurance plans in India can help you secure your family’s financial future and allow them to fulfill their financial goals with the help of the large sum assured. While buying the term plan, it is essential to focus on the sum assured, tenure, and premium. You can use the term plan calculator to find the best policy that suits your requirements.

When you buy term insurance, it is advisable to understand the policy’s terms and conditions before buying it. Some insurers have a specific condition on death benefits, which you should know about before purchasing a term plan. Here are some types of deaths that are not covered under term insurance plans.

  • Death due to pre-existing medical condition

Suppose the policyholder has not disclosed any pre-existing medical condition while buying the policy, the insurer will not handover the death benefits to the nominee of the policy. 

  • Death due to participation in hazardous activities

The policyholder’s nominee is not entitled to claim the death benefit if the insured dies because of participation in hazardous or adventurous activity. It is because the insured had taken part in these life-threatening activities consciously. The insurer will not approve the claim if the policyholder passes away while indulging in adventurous activities, like car racing, bungee jumping, paragliding, sky diving, or hiking, among others. If you are an adventure freak and enjoy participating in such activities, inform your insurer before buying the term policy.

  • Non-disclosure of the smoking habit

When you fill the term insurance application form, there is a column where you have to mention whether you smoke or not. If something untoward happens to you due to smoking, and you had not mentioned this habit while applying for the policy, the insurer can discard your nominee’s claim when they find out about the truth. However, if you have honestly disclosed your smoking habit, the insurer is liable to pay the death benefit. Here, the premium amount is considerably high when compared to non-smokers.

  • Death due to suicide 

If the policyholder commits suicide during the first year of the term plan, the insurer will not settle the claim submitted by the nominee. However, certain insurers provide cover in case of suicide from the policy’s second year. However, this is subject to specific terms and conditions.

  • Death due to alcoholism

The insurer will reject the nominee’s claim if the policyholder dies due to alcoholism or overdose of narcotic substances. There can be accidental deaths if the policyholder is under the influence of alcohol. Even in such cases, the insurer will not accept the claim. There are no insurance companies in the market that offer cover to heavy drinkers.

  • Death due to natural calamities 

Natural calamities, like an earthquake, tsunami, landslides, etc., can occur anytime. If the policyholder dies due to natural disasters, the policy’s nominee is not eligible to receive the death benefit from the insurer.

Besides this, a term plan does not cover the death of the mother during delivery, death due to murder, and death due to involvement in criminal activity. 

When you buy term insurance, ensure that you share all the necessary details with the insurer. Besides this, understand the various types of deaths that life insurance companies do not cover. It is important to remember the purpose of buying a term plan. So, read all the documents of a term insurance policy properly while purchasing a plan.