7 Types of Deaths are not Covered in Term Insurance Policy

Most are aware of the fact that life insurance companies pay a lump sum amount as death benefit to the nominee of the insurance holder on the latter’s death if it happens within the policy term. However, there are certain types of death that are not covered by life insurance policies. It is important to know about them before you get a life insurance policy to avoid hassles and disappointments while making a claim.

7 major types of death cases which are not covered in term life insurance plan:-

• If the policyholder is murdered during the tenure of the life insurance, no claim would be paid. During such an incident, extensive research and investigations are carried on to find out whether the policy holder was involved in a crime, whether he himself was the criminal or not. Only if it has been decided by the courts, that the policyholder is acquitted and had no part to play in the crime, would the payment be made. If the policyholder was involved in the crime itself, then the insurance company can withhold the payment.
• Any death that happens due to the influence of alcohol or any other kind of narcotics will not be covered by the insurance company. Drunk driving is the most common instance. It has also been seen that accidents are caused by people tripping and falling from great heights under the influence of narcotics and alcohol so if any such aspect comes out in the investigation, the payout would be withheld.
• In the same way, heavy smokers, who have higher level of health risks will have to notify the insurance company while getting the premium. Because of their lifestyle, the additional amount is added to their premium. This is because smoking could lead to added complications and even cancer and so if this is revealed later, then the insurance company will be well within their rights to withhold the death benefit.
• Death by participating deliberately in hazardous activities is not covered by insurance companies. There are those who participate frequently in such activities such as paragliding, surfing and skiing on mountain slopes. It is important to disclose to the insurance company the nature of one’s lifestyle or else such claims are not entertained after the death of the individual in most cases.
• There are many who try and withhold information regarding pre-existing illnesses while getting a life insurance policy. And this is exactly the reason why most insurance companies insist on doing their own health check-up while granting a policy. If the death of the individual occurs because of a pre-existing illness, then the claim is not entertained by most companies. Also, there are a number of other deaths that are not covered by life insurance like HIV, drug overdose and the like.
• In case of a female policyholder, if the death occurs during childbirth, then it is not covered by a life insurance policy. Complications related to pregnancy and childbirth are not covered by life insurance policies.
• The life insurance policies do not cover suicidal deaths, at least in the first year of getting the policy. Some companies do so from the second year onwards, although they are also subject to terms and conditions. An investigation is also conducted to find out whether the nominee himself had anything to do with the mental trauma that was caused which led the policyholder into committing suicide.

These are the instances which are not covered by life insurance policies. Yes, some can be included with the help of additional riders and with the payment of extra premium, but it is still a good idea to have a clear knowledge of the inclusions and exclusions of such a policy.