A term insurance plan is among the oldest and purest forms of life insurance available in the country, providing an extensive sum assured to the beneficiary at affordable premium prices. The beneficiaries will get the sum assured if the policy is valid or is within the tenure. If the policyholder survives the term, the insurance cover ceases, and nothing is payable. However, it would depend on the type of term plan purchased by the policyholder. 

The term insurance payout depends upon the nature and extent of coverage provided by the insurance company and the term policy you have opted for. Every life insurance type, including term insurance, are inherently legal contracts between the insurance company and the policyholder. Like every contract, even term insurance has clear set of rules, guidelines, inclusions and exclusions, and every policyholder needs to aware of these to ensure stress-free claim settlement.

In this article, we will look at the types of death included and excluded under a term insurance policy, also, known as a death insurance plan.

Types of deaths covered by a term insurance plan:

Any natural deaths or health-related issues are covered under the term insurance plan. Let's look at them closely:

1. Death due to a medical condition/natural death:
   
   A term insurance plan will cover health-related deaths or natural death. The death can be because of diseases or medical conditions that ultimately result in the policy's death. For such circumstances, the beneficiaries are paid the sum assured of the term plan. For instance, if the policyholder passes away suddenly in their sleep, it will be covered under natural death. If the policyholder is affected by any disease or falls ill that will result in death, it will be treated as a health-related death. 
   
   
2. Death due to suicide:
   
   Death by suicide is covered only after 12 months from the term policy initiation. This means, if the policyholder dies by suicide one year after the policy came into force, then the beneficiaries will receive the complete sum assured.
   
   However, insurance companies understand the emotional as well as financial impacts of losing a loved one, especially by suicide. Therefore, if the death by suicide occurs in the first 12 months of the policy, the insurance company pays out a specific percentage of the total premium paid by the policyholder.
   
   
3. Accident-related death:
   
   Insurance plans also cover accidental deaths. A policyholder can add riders^# to their plan, which will provide them with an additional sum assured on death because of an accident. Accidental death is defined as the sudden, involuntary and unforeseen event caused within a specific number of days (generally 90 to 180 days) of such an event or trauma, which is treated as an accidental death. 
   
   Examples of accidental death are listed below:
   
   
   • Death due to accident that involves motor vehicles
   • Death due to fire-related injuries
   • Death due to accident involving machinery at workplace or factory accidents
   • Death due to accidentally falling from a rooftop or a building
   • Death from an electric shock at home or anywhere else
   • Death because of lightning strike or earthquake or other natural calamities.
   •  Death due to drowning in a river or slipping in the bathroom
   
   

   Types of death not covered by a term Insurance plan:
   

    

   When it comes to coverage under death insurance, there are certain exclusions under the lifestyle category. If you're a smoker, it must be mentioned in the policy. The insurer will charge an additional premium to calculate the risk of death because of smoking. Insurance companies consider chain-smokers as a great risk to the insurance company. If you hide these facts, the insurance company may reject the insurance claim.
   
   

   Along with this, if the policyholder passes away due to any circumstances listed below, the beneficiaries will not receive any coverage from the insurance company:
   
   

   • Death caused by driving under the influence of alcohol and/or drugs. 
   • Death due to excessive consumption of alcohol or drugs.
   • Death due to participation in racing events, adventure sports and illegal activities. 
   • Death due to childbirth and pregnancy.
   • Death due to pre-existing health condition.
   • Death due to any sexually transmitted diseases like HIV or AIDS.
   • Death due to murder committed by the beneficiary. If the death involves any investigation, then the insurance company will put the claim on hold until the acquittal of the beneficiary. 
   • Death due to natural disasters not covered by the policy. 
     
     

   Remember the following policyholders!
   
   

   If the policyholder brings any changes in their lifestyle after purchasing the insurance policy, the policyholder is not liable to share the information. However, if the policyholder continues to smoke after purchasing the policy, the insurance coverage is applied, and the insurance company must process the claim without any issues. If the policyholder faces any issues in claiming the policy, they can approach the grievances cell of the insurance company of the IRDA (Insurance Regulatory and Development Authority) directly. 
   
   

   However, if you're a policyholder, it would help if you checked the clauses for attaining the death benefit with your insurance company. This is because different insurance companies have different clauses for death. It's recommended that you get all of your doubts cleared by the insurance company. It would help if you shared this information with your insurance company and help with the claim settlement process.
   
   

   L&C/Advt/2022/Nov/2979