Coverage in Life Insurance

Under life insurance coverage refers to the amount of risk cover that is provided to the life assured by the insurance company. Life insurance is a contract between an individual and life insurance company under which the former promises to provide life cover to the individual in exchange for regular premium payment. Under a life insurance policy the coverage amount is chosen by the policyholder and the coverage amount i.e. sum assured determines the amount of premium to be paid periodically by the life assured.

Life insurance policy provides coverage against the uncertainities of life which includes an untimely demise of the life assured during the policy tenure. In case of an unforeseen demise of the life assured during the policy term, a death benefit is provided to the family of the life assured.

Life insurance policy covers death of the life assured due to natural causes and medical conditions. Additionally, life insurance policy also provides financial protection to the family of the life assured in case of life assured’s untimely demise due to an illness or accident. There are several riders that help an individual get specific coverage from specific situations such as coverage for critical illness, accidental death or accidental total and permanent disability.

What Does Life Insurance Not Cover?

Below mentioned are some aspects which are not covered under a life insurance policy:

• Suicide of the life assured
• Death under the influence of alcohol and drugs
• Death on account of participation in any dangerous activities
• Death from pre-existing medical conditions
• Death due to undisclosed medical condition or personal habit
• Death caused during an terrorist act.