What Are The Forms of Deaths Covered By A Life Insurance Policy?

Jul 03, 2018 | 5 months ago | Read Time: 3 minutes | By iKnowledge Team

Life has its ups and downs. And no matter how prepared you might be for any contingencies, sometimes death can come without a warning. A healthy life can minimise lifestyle disorders but sometimes, natural calamities can deprive us of our loved ones. To soften the blow for your near and dear ones, consider a term insurance plan, so that they can meet life head on in your absence. A term insurance plan can provide financial protection to your family in the event of your death. Let’s look at some forms of deaths covered under a life insurance plan:

1. Natural death

Death due to medical conditions without physical injuries is included in the natural death category. These include death due to a disease, aging, stress, stroke and sickness. In this case, hospitalisation is not a pre-requisite for coverage under term insurance. The nominee receives the sum assured under the policy, once the insurer is notified about the policyholder’s demise.

2. Critical illness

A critical illness is a special category of sickness like heart stroke, paralysis, kidney failure and coma. To get the complete list of critical illnesses covered under the policy, it is important to go through the plan. For example, Aegon Life offers a term insurance known as the iTerm Plus plan. The policy offers financial protection in the event of death including death due to critical illness. Moreover, you can avail a critical illness cover for an extra premium.

3. Accidental death

In some cases, an individual may lose his/her life in an accident. At such times, accidental death benefits can offer financial aid to the family members, especially if he/she has been the sole earner in the family. The insurance policy also covers accidental hospitalisation expenses, in such premature deaths. However, an exception to this is, if the insurer detects that the accident occurred due to alcohol or drug influence or during an illegal activity, the payout may be denied.

An insurer may or may not accept a claim associated with certain forms of death. The exclusions include:

a) Suicide

Insurers treat claims associated with a suicide differently. If the policyholder commits a suicide within a year of taking the policy, only the premiums paid are returned and not the benefits. However, if the policyholder commits suicide after a year of taking the policy, the nominee receives the whole cover amount. For example, under the iTerm Plus Plan by Aegon Life, the nominee gets 80% of the premium paid, provided the policy is active and death occurs within 12 months of the policy commencement or revival.

b) Adventure sports

Some activities like bungee jumping, paragliding and motor racing may result in injury or death. The insurer excludes the payout if death has occurred due to these activities.

c) Other

There are some additional terms and conditions associated with the accidental death benefit. The insurer may or may not receive a payout if the death occurred due to certain conditions. For example, Aegon Life may not pay the sum assured under accidental benefit for a death that occurs due to war, terrorism, invasion, hostilities, civil war, martial law, rebellion, revolution, insurrection, military power, riot, and civil commotion. Moreover, if the insurance company suspects a case of homicide, it can deny the claim. If the nominee claims himself not guilty on investigation, the claim can remain on hold until his acquittal.

Conclusion

To be sure of all the clauses, examine the fine print in the policy document carefully before signing it. If the policy does not include the risk of terrorism and other acts of external violence, you could ask for its inclusion, which could increase the premium. This would ensure you are covered under all circumstances. Consider all the options and choose the best policy based on your requirement.

Advt. no.: IA/Jun 2018/4138


Calculate premium for your Term Plan

  • Y N
    • Annual Income
    • Sum Assured
    • Select Cover Upto Age
    • Name
    • Mobile
    • Email ID
Your Annual Premium for Aegon Life iTerm Insurance Plan
Prev
A Tax Saving Guide for Financial Year 2018-19
Next
How to Manage Investments to Get a Regular Income?

RELATED ARTICLES