Term insurance is a type of life insurance, where the life risk of the insured is covered. But, in term insurance plan, the benefits are only offered in case of deaths. If the insured’s demise within the policy tenor, then the nominee will get the money.
But, all forms of deaths are not covered by a term insurance.
Deaths that are included:
Suicide- Earlier, suicide was not included. But now, there is a one-year waiting period and after which if the insured commit suicide it will be valid. In case the insured commits suicide during the waiting period, the nominee is liable to receive 80% of the premium paid.
Natural death- If the death is caused by health issues, natural causes, diseases or medical conditions, the nominee is liable to receive the full sum.
Death by accident- If the death is occurred by any unforeseen or sudden death caused by external, violent and visible events, within a maximum of 90 to 180 days is an accidental death and nominee will get death benefits.
Deaths that are excluded:
- Death due to self-inflicted injury, participating in adventure sports, racing events or participating in illegal activities
- Death caused due to sexually transmitted diseases like HIV or AIDS
- Deaths by accidents due to driving under the influence of alcohol or intoxicating drugs
To know the other types of death covered in Term Insurance Plan, read: Types of Death Covered in a Term Insurance Plan
