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What Kind Of Deaths Are Not Covered By A Life Insurance Plan

Last updated on May 8th, 2018

Life is unpredictable, and we never know what is going to happen in the next moment. Life insurance is the best way to take care of the financial needs of your family upon an unfortunate death. Term insurance is the most efficient plan preferred by most of the policyholders. The policy delivers a lump sum payment to the beneficiary, in the case of the death of the policyholder.

Death claims not covered by the life insurance policy

However, it is very important to go through the fine print of the policy before you sign the dotted line. The term insurance policy does not cover a certain type of deaths. These are:

  1. Drugs or alcohol –  Accidental death due to driving under the influence of drugs or alcohol
  2. Adventure Sports – Death due to participation in high-risk activities like racing and adventure sports
  3. Pregnancy – Death during childbirth and pregnancy
  4. Pre-existing health condition – Death occurring due to a pre-existing health condition, which is not mentioned at the time of taking the policy
  5. Illegal activities – Death caused while participating in illegal activities

Death claims the life insurance policy refuses to pay

Apart from the above five types of deaths, there are some other exclusions where the insurance company refuses to pay up for your policy.

  • Lifestyle risks – Insurance policy does not cover death occurring due to life-threatening habits like smoking and drug abuse. If you have a habit of smoking, the details should be mentioned at the time of signing up for the policy. Some insurance companies calculate the premiums depending upon the additional risk arising out of your habits like smoking
  • Suicide – Term insurance plans do not cover death due to suicide. Suicide death is also excluded from the Group insurance plans. Insurance policies issued after January 1 2014, will honor claims of suicide death. But if the suicide is committed within the contestable period of one or two years, as mentioned in the policy, the claim will not be honored
  • HIV/AIDS – Insurance companies will not honor the claim if the death occurs due to sexually transmitted diseases like HIV and AIDs
  • Homicide – If the policyholder is murdered by the nominee, the insurance company will reject the claim. In the case of homicide, the insurance company honors the claims only after the close of investigation procedures by the local law enforcement authorities. The claim is honoured only when there is a clear indication that the nominee is not involved in the act of murder
  • Natural disasters – Deaths happening due to natural disasters like earthquakes and Tsunami are not covered by life insurance policy. Insurance companies offer additional riders to cover such deaths

All the policies are not uniform, and the terms and conditions vary from one insurer to another. Read the terms and conditions of the policy document to know the list of deaths included in your policy before you sign the contract. Never hide any health conditions and lifestyle habits while taking a policy. Select a life insurance cover that covers all your requirements, and opt for additional riders, if you feel the need to do so.

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