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Does Your Term Insurance Plan Cover Accidental Death?

24-June-2021 |

Purchasing a term insurance plan is considered a valuable backing to help your loved ones overcome financial challenges in your absence. Under the plan, a lump-sum death benefit is provided to your nominees in case of your unexpected death.

However, death can occur due to varied reasons. One of these reasons is accidental death. According to the National Crime Records Bureau, India recorded a total of 3,74,397 accidental deaths in 2020, out of which road accidents contributed to 1,33,201 deaths and 3,35,201 instances of injuries, bringing the total to 3,54,796 cases.

Have you ever wondered if your term plan covers accidental death? Well, accidental deaths are covered in a term plan as rider# options. So, what is the term plan accidental death cover? Let us understand the meaning, benefits and ways to include it in your term insurance plan.

Before we get started, let us understand what a term insurance plan covers and does not cover as far as the death benefit is considered.



Term Insurance Death Benefit

A term insurance plan provides the lump sum death benefit to your family in case of your unexpected death due to the following reasons:

  1. Natural death

  2. Death due to health issues

  3. Death due to natural calamities

  4. Death due to an accident

 

However, it does not cover deaths for the following reasons:

  1. Death due to sexually transmitted diseases

  2. Death due to homicide by the beneficiary

  3. Overconsumption of intoxicating substances such as alcohol

 

Accidental death is considered differently by the insurance providers. They provide the sum assured to the nominee in case of the policyholder's accidental death. However, some insurers provide an optional rider# benefit to cover accidental deaths. It provides additional death benefit funds apart from the sum assured.

For instance, the Tata AIA term plan Sampoorna Raksha Supreme (UIN: 110N160V02)

provides the accidental death benefit as an additional rider#. It is optional and comes at an additional cost. However, considering the term insurance benefits, it is certainly beneficial. Here is a detail about it.



Term Plan Accidental Death Benefit Rider

The accidental death benefit option in the Tata AIA Life Insurance Sampoorna Raksha Supreme term plan Supreme (UIN: 110N160V02) is a part of the Tata AIA Life Insurance Non-Linked Comprehensive Protection Rider. It offers coverage for different unforeseen events and risks, such as the death due to an accident, disability, terminal illness, critical illness etc.

The insured amount will be payable to the nominee in case of the policyholder's death due to an accident. The death should have occurred within 180 days of the accident.

The benefit gets doubled under the following circumstances:

  1. The policyholder travelled in public transportation such as train, bus, etc., as a fare passenger and on an established route.

  2. The insured is in an elevator certified to carry passengers.

  3. The insured died due to the burning of public buildings such as cinemas, hospitals, hotels, etc.

  4. The insured person travelled on an established route on a commercial passenger airline.

It is important to note that the benefit for accidental death due to an adventurous or sporting activity such as skydiving, scuba diving etc., may not be applicable unless it is mentioned as part of the policy or rider# terms and conditions.



Advantages of the Accidental Death Benefit Rider

The benefit from the accidental death rider# will become payable when the conditions get satisfied. However, it also provides the following advantages:

  1. Payout options - The policyholder can avail of the payout as a lump sum, a regular income up to 10 years, or a combination of lump sum and regular income up to 10 years. Access these benefit options and purchase the online term plan by calculating the premium based on the policy term and sum assured using the online term insurance premium calculator.

  2. Extend protection - The rider# provides the option to extend the life cover protection to your family members under the same term plan.

  3. Return of premium - The policyholder can also receive the premium amount paid if they survive the policy term on the maturity of the term policy with return of premium benefit.

  4. Flexibility - The rider# can include the risks for self or family during policy inception or renewal.

  5. Tax* benefits - The premium paid for the term plan and the payout qualify for the tax* deduction and exemption under Section 80C and Section 10(10D) of the Income Tax Act, 1961.



Who Should Purchase the Accidental Death Benefit Rider#?

Policyholders might consider purchasing the accidental death rider in the term plan as unnecessary as the benefits can be received only when the conditions apply. It will certainly be a great monetary benefit for people working in places like

  1. Mining activities

  2. Heavy work industries

  3. Construction sites

  4. Offices as a security personnel

  5. Jobs that require frequent travelling, etc.

People working in such conditions are susceptible to accidents and have to secure their lives to benefit their families.



Accidental Disability Rider

There are situations wherein the policyholder suffers extreme physical injuries that lead to total and permanent disability due to an accident. This rider# can provide financial assistance in such cases too. Individuals can opt for the payout as income till survival or waive the future premium payments. It will reduce the financial burden on their family.



Conclusion

Term insurance plans are traditional life insurance plans. However, policyholders can customise it based on their lifestyle, work culture and income. Accidental deaths are uncertain. And, it is common in a work environment that involves physical challenges and hazardous activities. Individuals need to invest in life insurance plans to secure their family if they are the sole earning member or contribute towards their expenditures in any way. And, the inclusion of the accidental death benefit becomes a basic necessity based on the nature of work.

The benefit comes at an additional cost. However, it is worth the investment considering the payout and the advantages! Therefore, check if your term plan covers accidental deaths and include one if your work or lifestyle scenario deems it necessary!

L&C/Advt/2022/Mar/0624

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimer
  • Insurance cover is available under the product.

  • The products are underwritten by Tata AIA Life Insurance Company Ltd.

  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.

  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.

  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.

  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.

  • #Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch

  • Guaranteed Returns/Payouts depend on Plan Option, Policy Term, Premium Payment Term and Age at entry