Does Term Insurance Cover Natural Death?
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To ensure the well-being of their families and loved ones after their passing, people make sure to establish arrangements and get insurance policies. In such circumstances, term insurance is a fairly common choice for insurance plans. Term insurance offers the insured's family financial security at reasonable premium costs in the event of an unforeseen event. The beneficiary's family receives a lump sum as a death benefit.
In situations where the beneficiary is unable to last the duration of the insurance plan, certain types of death are included and excluded.
Types of Death Included in Term Insurance
The following types of death are included while giving death benefits to the family of the beneficiary of the term insurance.
1. Natural Death Or Due To A Medical Condition
Both natural and medically caused deaths are covered under term insurance death benefits. An illness or other medical condition falls under the category of deaths that were caused by health issues. In such circumstances, the nominee would be given the term plan's full amount.
2. Death Due To Accident
If an accident is the cause of death, term insurance offers death benefits. Additionally, accidental death benefits are offered, which guarantee an additional payment. There are, nevertheless, some prerequisites for the same. The beneficiary of the term insurance cannot pass away while driving while under the influence of alcohol or any other substance, or as a result of any criminal behaviour. Extreme and adventure sports-related fatalities are also not covered by life insurance policies.
3. Death by Suicide
If the insurance is a non-linked one, the beneficiary is eligible to receive 80% of the premium for the first 12 months after the policy's start if the policyholder dies by suicide. In the event of linked plans, the policy's beneficiary would be given a payment equal to the full amount of the premiums paid. However, if the policyholder dies by suicide within a year of the policy's expiration or revival, the nominee will be entitled, under the terms of the policy, to the full amount assured or death benefit. Suicidal death may or may not be covered by some life insurance companies. Before buying an insurance policy, customers should carefully read the terms and conditions.
Types of Death not Included in Term Insurance
The following types of death are not included in giving death benefits to the family of the beneficiary of the term insurance.
1. Natural Calamities
The policyholder's death cannot be taken into account when filing a claim if it results from a natural disaster such as an earthquake or flood. Both the beneficiary and the insurer should be informed of this.
2. Homicide
The insurance company will deny the claim if the insured is murdered by the beneficiary and the inquiry shows that the nominee was also involved in the crime. The request for a claim would be put on hold until the recipient received clearance.
3. Undisclosed Disease Or Habit
It is crucial to inform the insurer of all habits and illnesses connected to the policyholder's life and way of living. The corporation would not accept the claim from the beneficiaries if one of these behaviours or illnesses turned out to be the cause of death.
4. Intoxication
The term insurance plans by the insurance company do not provide coverage if the insured dies as a result of drug or alcohol usage.
5. Terminal Disease
Term insurance does not provide coverage for conditions like HIV or cancer that have reached the fourth stage of development. To prevent claim denial, riders with protection against this type of disease could be investigated.
Is Heart Attack Covered Under Term Insurance?
Yes, if someone with term insurance passes away naturally due to a covered medical condition such as a heart attack, their beneficiaries can claim the sum assured. Just check the policy details for coverage and any exclusions.
Conclusion
It is always best to know about the types of death that are covered in term insurance and the types of benefits that the family or the nominee of the beneficiary would be receiving from the same.
There are always different cases of death, therefore before buying any insurance plan, the buyer should go through both the inclusions and exclusions to avoid any discrepancy during the claiming of the benefits.
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