These Causes Of Death Do Not Have Term Insurance Coverage!

Term insurance is a great way to safeguard your loved ones’ financial security in the event of an unfortunate incident. These insurance plans have reasonable premium costs and provide a lump sum death benefit to the policyholder’s nominee(s).

Though these plans ensure the future financial security of the policyholder’s nominees in case of an unfortunate demise within the policy tenure, they cover every cause of death. In this article, we will learn about the causes of death that do not have term insurance coverage.

Deaths Without Term Insurance Coverage

Here are the deaths which do not have coverage under a term policy:

1. Death under the Influence of Alcohol- Suppose the policyholder passes away due to driving under the influence of alcohol or other narcotics. In this case, the insurance company will reject the claim. Most insurers do not offer life insurance coverage to those with heavy drinking or narcotic consumption habits. As a result, sometimes customers may not reveal these habits to insurance companies while buying term policies. It may lead to the insurer withholding the death benefit in case of their demise within the policy tenure. Those who consume liquor in heavy quantities should disclose the same in their proposal forms to the insurance company to help prevent claim rejections in the future. 
2. Death due to heavy smoking- Smokers should disclose this to the insurance company before buying a term policy. They have higher risks, making insurers usually add higher amounts to their premiums. Those not disclosing this habit will only put their nominees in trouble since the insurance company will reject their claims in case of death due to smoking.
3. Murder- The insurance company will not provide compensation for two scenarios concerning the murder of a policyholder. The first one is where the nominee is has any criminal history. In this situation, the insurer will refrain from settling the claim if it comes to light that the nominee was involved in the murder of the policyholder after investigations. The payout will only come through if the nominee is innocent of any crime or if the authorities dismiss the charges of murder. The insurance company will withhold the payout indefinitely until the resolution of the case.

In the second scenario, the insurance company will not settle the claim if the policyholder passes away due to involvement in any illegal or criminal activity. If the murder happens due to any such crime or criminal activity in which there was involvement, then this principle will come into force. The nominee will only receive the lump sum payout if the policyholder’s death occurred for natural reasons, even if the policyholder possesses a criminal record.

1. Death due to participation in risky activities- Death arising from any hazardous or adventure activity will not have coverage under a term policy. Activities like skydiving, car racing, bike racing, paragliding, parachuting, and hiking fall under this category.
2. Death due to pre-existing medical conditions- If the policyholder passes away due to any health condition present while buying the term policy, then the claim will not be settled by the insurance company. Specific riders are necessary for coverage of critical illnesses. Deaths from STDs (sexually transmitted diseases) do not have coverage from insurance companies in case they do not have coverage under any rider.
3. Death from childbirth- If the policyholder passes away owing to complications in the pregnancy or due to childbirth, then the insurance company will not pay the lump sum to the nominee in a term policy.
4. Death due to suicide- Most insurance companies do not cover death due to suicide. The clause will be present in the policy’s terms and conditions. You should read through the same carefully before investing.

Along with these deaths, insurers do not offer coverage for deaths due to terrorist attacks, deaths outside the country, etc. Scrutinize the inclusions and exclusions while browsing through your policy document. More awareness is necessary about these specific deaths that do not have coverage under term insurance.

Conclusion

While choosing your term insurance policy, make sure that you use a term plan calculator online to work out the payable premium amount. It will help you build and stick to your monthly budget. Always pay your premiums before the due date to avoid any penalty or policy lapses, and keep your coverage active throughout the entire policy tenure.