Both policyholders and beneficiaries should know which death is not covered in term insurance, as the lack of that knowledge can lead to the rejection of a claim after the policyholder's death during the term. If you know what type of death is excluded from your policy, you can avoid a situation where you pay the premiums for a plan, yet it does not help your family in your absence.
Life Cover Starting @ just ₹18/day*
Choose India’s Only Personalised Term Plan
Modify coverage as per your life stages & commitments
Hassle-Free Claim Settlement
99.38% Claim settlement ratio*
Smart Income Tax Savings
Save up to ₹54,600* on your taxes
Both policyholders and beneficiaries should know which death is not covered in term insurance, as the lack of that knowledge can lead to the rejection of a claim after the policyholder's death during the term. If you know what type of death is excluded from your policy, you can avoid a situation where you pay the premiums for a plan, yet it does not help your family in your absence.
Let’s take a closer look at major death scenarios that term insurance does not cover.
If the nominee or beneficiary murders the policyholder, they will be deemed criminal, and the insurance company will reject their claims. However, if the nominee is found not guilty, insurers may accept the claim and pay the claim amount.
Another scenario involves the policyholder being engaged in criminal activities and being killed. Insurance providers will not pay the claim amount if a policyholder's life is lost due to involvement in criminal activity. However, if a policyholder had criminal involvements but died of natural causes, the nominees or beneficiaries will receive the claim amount.
Artificial calamities or man-made disasters are disorders of a massive scale that some kind of human action or inaction has caused. Oil and chemical spills, wars, terrorism, and nuclear accidents are some of its examples.
Suppose a policyholder dies from foreign hostility, invasion, war, armed or unarmed truce, rebellion, mutiny, riots, military usurpation, power usurpation, riots, civil commotion, civil war, revolution, or insurrection. In that case, some insurance providers will not pay the claim amount. To know for sure, you need to carefully review your policy details and see if death due to man-made calamities is covered.
Death can happen due to a single or multiple drug overdose, or it can occur from combined drug intoxication (CDI). Be it recreational drugs or acute alcohol poisoning, death caused by intoxications are not covered by term insurance.
If a beneficiary or nominee makes a claim in such scenarios, the medical investigation will easily declare the cause of death, and they will not receive the claim amount. Most insurers do not accept applications from drug users or heavy drinkers. Therefore, it is recommended to disclose drug abuse or alcohol consumption history so that you do not waste money on the premiums and your family does not suffer after your death.
Within the first year of term policy, most insurers in India do not provide coverage for death due to suicide. This exclusion generally stays there for a few years after the purchase of the policy. After which insurers can lift it.
For example, it may allow the nominee or the beneficiary to receive 80% of the money paid for the policy or the amount their policy is worth at the time of the policyholder's death if the plan is still active.
Hazardous activities like bullfighting, base jumping, wildlife interactions, free solo climbing, volcano exploration, big wave surfing, cliff diving, parachuting, skydiving, and street racing can cause fatal accidents and end one’s life.
Usually, term insurance does not cover deaths due to adventure activities like these. Therefore, inform your insurer and seek insurance-related advice if you engage in such activities. It can save you from a potential claim rejection in the long run when it matters more.
During and after pregnancy and childbirth, there can arise complications that lead to the death of the mother. Although most of the complications that develop during pregnancy are treatable or preventable, a woman dies every two minutes due to childbirth or pregnancy.
Insurers may refuse to pay the beneficiary the sum assured if the policyholder dies due to pregnancy or childbirth.
If a policyholder dies due to a pre-existing health condition but does not disclose it when buying the term insurance, there is a high chance of the insurer not paying the claim amount.
It is worth reiterating that you must provide your insurer with all related life and lifestyle data. If the insurance provider witnesses dishonesty on the policyholder's part, they will not have any reason to comply.
Insurance companies will reject claims for deaths that occurred while the policyholder was driving under drug influence or in an intoxicated state. You already know that most insurance companies do not accept applications from people indulging in alcohol or recreational drugs.
Term insurance plans may not provide coverage if policyholders die from HIV/AIDS. So, individuals who are beneficiaries of a policyholder who suffers from HIV/AIDS may not get the claim amount if the insured person's death happens due to HIV/AIDS. However, some plans cover this disease, too. So, it is a must to compare various plans before purchasing one.
These are some of the common types of deaths that term insurance covers:
Death due to natural causes usually means an accident or outer force did not cause it. This term also means a person has died of old age or his/her organs have slowly stopped working. There is much nuance to the term though, as ‘natural’ includes cancer, heart attack, infections and so on. Still, they are not included as ‘natural causes’ because it does not signify anything medical.
Natural causes generally indicate natural physical reasons, such as gradual loss of strength, appetite, and energy or hardening and narrowing of the arteries that supply blood to the heart.
Globally, most deaths happen due to non-communicable diseases. The top 10 diseases that were the reason for these deaths are ischaemic heart disease, stroke, chronic obstructive pulmonary disease, lower respiratory infections, neonatal conditions, bronchus, trachea, lung cancers, Alzheimer's disease and other dementias, diarrhoeal diseases, Diabetes Mellitus, and kidney disease. If policyholders succumb to death due to medical illness, term insurance generally covers it.
Term insurance generally covers accidental deaths like electric shock, downing in the river, fire injuries or motor vehicle accidents. Moreover, many plans offer riders that give additional accidental death benefits.
Although death from natural disasters has decreased over the last hundred years it still is the cause of 40 to 50 thousand casualties per year. From storms and earthquakes to droughts and floods if a natural disaster causes a policyholder’s death, the insurance company generally covers it.
With the rise in epidemics around the world, many people have been looking for term insurance if their plan covers the disease-causing such an epidemic. Current term plans provide coverage for COVID-related deaths only if the policyholder catches the disease after purchasing the plan and not before.
Knowing which death is not covered in term insurance is crucial to ensure your family gets adequate financial protection in your absence. Insurers reject claims if accidents to policyholders happen due to criminal activities, alcoholism, drug abuse, a ploy by nominees or beneficiaries or while taking part in adventure activities. Now that you know these exclusions and inclusions, you can choose policies wisely and communicate clearly and effectively with your insurer. Moreover, it also makes clear how important reading the terms and conditions of your policy is.
Here is a list of questions people frequently ask about which death is not covered in term insurance:
1.5K Linkedin Followers 
Reviewed by Vaibhav Kumar Kaushik 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
Products 
Company
Legal
Support
Car Insurance 
Bike Insurance
Health Insurance
Group Health Insurance
Travel Insurance
Life Insurance
