Types of Deaths Covered in Term Insurance


With the ever-changing world we live in, it has become increasingly important to get a decent insurance policy that helps us protect the future of our family and loved ones. One of the most popular plans that provide extensive coverage at affordable premiums is the term insurance plan. In a pure term plan, the policyholder’s beneficiaries will get the sum assured if they pass away during the plan’s tenure. If the policyholder survives the plan’s term, then the insurance coverage is dissolved.

However, you must purchase the best online term plan with the sole intention of getting a decent life cover from the policy. They aren’t investment vehicles and must be purchased only for the coverage it provides. These plans also offer the policyholder tax benefits on the premiums paid under Section 80C of the ITA (Income Tax Act). While getting a term plan may help you someday, it will be better to understand the types of death covered in the plan.

The types of death covered under term insurance:

  1. Accidental death:

A term insurance plan will provide insurance coverage to a policyholder’s beneficiaries if one passes away due to accidental death. Generally, one can add riders like a waiver of premium or an accidental death rider to their term insurance plan, which offers the policyholder additional protection in specific situations.

In insurance terms, an accidental death means sudden, involuntary and unforeseen events caused by a visible, violent and external force. The death should have been caused by such an accidental event and within a specific number of days from the event. The number of days generally ranges between 90 to 180 days from the event. If the circumstances of the policyholder’s demise meet these criteria, then it can be called an accidental death.

Depending upon the term plan offered by the life insurance provider, other examples of accidental death may include:

  • Death due to an earthquake or any natural calamity
  • Death due to drowning in a natural water body such as a river
  • Death due to fire-related burns and injuries
  • Death due to accidents involving factory machinery at work

But do note that under some situations, as given below, the accidental death of the policyholder cannot be due to the following causes:

  • Death due to an accident when the policyholder was under the influence of alcohol/substances.
  • Death due to involvement in any type of illegal or criminal activities
  • Death due to an accident caused during adventure sports like skydiving, bungee jumping, etc.
  1. Natural death or death due to a medical condition:

A term insurance plan covers any health-related or natural death. This death can be because of any diseases or medical conditions that may result in the policyholder’s death. For such situations, the policyholder’s beneficiaries are provided with a sum assured of the term plan.

If the policyholder passes away suddenly in their sleep, it is treated as a natural death. In another situation, if the policyholder suffers from a certain disease that leads to their death, then it will be labelled as a health-related death. These deaths are covered in the term insurance plan.

To provide death benefits to a deceased policyholder’s beneficiaries, insurance companies classify the nature and the cause of the death in their term insurance policies. This is a necessity because, without adequate details, it becomes difficult for insurance providers to settle claims. Moreover, by setting such guidelines in their policies, insurance companies ensure that genuine claims can be settled without any hassles.

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