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Kind of deaths not covered in term insurance

March 16, 2019 2784
A traditional term insurance plan serves as a futuristic guarantee of substantial protection for your financial health and for the monetary security of your loved ones by offering due coverage of the financial goals and aspirations of your loved ones, even in your absence. The main plan benefits accrued under the terms and conditions of a standard term insurance plan are often referred to as the sum assured and this is the primary amount of coverage that the plan is offering. A term insurance plan works in a very basic manner. The payable premiums against the policy terms are proportional to the main plan benefits and this coverage comes in the shape of the death benefit i.e. the sum assured for which the nominee(s) of the policy holder are eligible in the event of the policy holder's demise during the plan term. In the event of the plan maturity, however, no benefits are due to be disbursed by the insurance company. These days, however, with the addition of innovative features like the return-of-premium, there are terms that make a standard term insurance plan quite beneficial. In order to claim the benefits under the death-benefit clause of a term plan, there are certain parameters however, and these parameters are generally pre-decided at the time of policy purchase. Among such parameters, is the one that defines the scope of coverage in the event of the policy holder's demise and delimits the same to include or exclude certain kinds of deaths that may be or may not covered under term insurance. Following are the kinds of deaths that are not covered under a traditional term insurance scheme:
  1. Accidental death under the influence of intoxication: Although a traditional term insurance plan offers coverage against accidental death, death under the influence of drugs or alcohol is completely excluded from this purview. This means that if the policy holder dies accidentally while under the influence of intoxicating substances, then the plan benefits stand automatically withdrawn.
  2. Death due to suicide: In India, IRDAI (Insurance Regulatory and Development Authority of India) is the governing body for the insurance claims and their disbursal. As per the IRDAI guidelines, suicidal deaths have been separated into those that are covered under policies purchased before and after 1st January, 2014. Under the established guidelines,
  1. For policies that were purchased before 1st January, 2014, no claim will be entertained if the policy holder commits suicide before completion of one year of the policy. Otherwise, the compensation will be handed out to the nominee(s).
  2. For policies that have been purchased after 1st January, 2014, 100% or full reimbursement of the claim will be made if the person commits suicide before completion of one year of the policy, in case of linked policies. For non-linked policies, a maximum of 80% will be compensated to the nominee(s).
  1. Death involving homicide: If the policy holder dies due to homicide and one or several of the nominee(s) figures as a possible suspect, then the claim-compensation to that nominee(s) will stand rejected, until her/his innocence is established in a court of law.

HDFC Life offers various term insurance plans that are aimed at creating and sustaining a credible financial base for you and your loved ones. For details, click on the mentioned link: https://www.hdfclife.com/term-insurance-plans

 

 

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HDFC Life Insurance Company Limited. CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101.

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