What types of death are covered in a term insurance plan?

Given the times we are living in, where we get to hear about young people losing their lives, buying term insurance is one of the first things that comes to our mind. Life surely does not come with a guarantee but that can’t stop us from taking care of our family at every point in life. If you have a family where the members are financially dependent on you, then one of the best things to do to secure their future is to get a term plan.

Nevertheless, there are various types of term insurance policies that you will come across and you need to know which term insurance plan will be the best suited for you. Also, there are many types of death covered in term insurance; therefore, you must check the clauses before you finalize the purchase of a term insurance plan. Do you want to know what type of death is covered in term insurance? Let us discuss:

• Natural death: Term insurance covers natural death. If the policyholders die of natural causes within the term of the policy, the beneficiaries can claim the cover.
• Death caused by accident: If the death of the policyholder happens because of an accident, it is covered under a term insurance plan. If the policyholder meets with an accident and passes away in the hospital because of the same, the nominee can get the payout from the insurer. However, if the policyholder meets with the accident under the influence of alcohol or drugs, the claim will be rejected by the insurer. Also if the policyholder has been driving an unlicensed vehicle, or driving crash while knowingly endangering himself and others, the policyholder may deny the claim. The types of accidental deaths are death involving motor vehicles accident, death caused because of an accident involving machinery at the workplace, death because of fire-related injuries, slipping in the bathroom resulting in death, death because of drowning in the water, death caused because of electric shock at home, etc.
• Suicide: If the policyholder commits suicide after a year of buying the term insurance, the beneficiary will be given only the death benefit.
• Homicide: If the policyholder is murdered within the plan period, the beneficiary will be paid the cover. However, if the beneficiary is found to be involved in the murder case, the claim will be rejected by the insurer.

Every insured need to know to claim the cover, the beneficiary has to show proof of death, which can be a Death Certificate also. In case, the insured did not die of the above-mentioned reasons, the insurance company may reject all claims.

In case of beneficiary claiming for more than two term insurance policies

If the beneficiaries intend to claim for more than two term insurance policies, they must follow the guidelines provided by the Insurance Regulatory and Development Authority of India. The beneficiaries in fact have to submit all the relevant details of the existing term insurance plan while they buy a new one. The information about the existing policy has to be mentioned in the proposal form. The beneficiary also has to submit the death certificate of the policyholder to the insurance company. The new insurance company will then verify all the information with the existing insurance company. If the verification is smoothly carried out and is successful, the beneficiary will be able to receive the claim from both insurers.

Buying a term insurance plan can be a big difference in the life of your family if you are not around. They will not only be financially taken care of but can also continue with their education and standard of living. If you have more queries about the various types of death including the recent rise of policies covering COVID-related deaths, you can visit the IIFL Insurance website and make an informed policy buying decision.