Life is unpredictable and therefore we should always be prepared for the best as well as the worst situations that can occur in the future. Term life insurance policy is one such way to do that. A term life insurance policy offers financial support to the family in case the policyholder loses his life during the policy term. Though we would never want to think about any such situation ever occurring in our lives, protecting the well-being of our loved ones should be our priority.
While a term life insurance policy stands as a blessing at the time of an emergency there are certain terms and conditions that come along with the policy. The insured and his beneficiaries need to understand these terms so that there are no misunderstandings and disputes at the time of claim.
Term life insurance policy terms and conditions:
Exclusions related to accidental deaths
Apart from the fact that accidental deaths are included in a term life insurance policy, it is not always accepted. After a claim is filed from the insured person’s end, the insurance company sends a special team to investigate the whole matter. There can be certain cases under which a company might not feel convinced and reject a term plan claim.
Death due to suicide
Suicide is present there on the “exclusions” list of every term life insurance policy. While some insurers offer nothing when such situations arise, others pay a percentage of the total amount. Other than suicide, an insurance company might also reject a claim if they found that the insured had undergone self-inflicted injury.
Death due to the consumption of drugs and alcohol
In case the policyholder's death is associated with the consumption of drugs and alcohol then the insurance company will not pay anything to the beneficiaries.
Death due to lifestyle issues
An insurance company is free to reject a claim if they find that the insured's death is related to his smoking habit which the company was not informed about.
Death due to involvement in criminal activities
If the insured's death is associated with any illegal or criminal activity then the company will not pay anything to the beneficiaries.
Death due to STDs
In case the policyholder's death is associated with any of the sexually transmitted diseases like AIDS, HIV, etc then the insurance company is free to reject the claims.
Pre-existing medical conditions
Generally, all term life insurance policies offer a waiting period before covering pre-existing medical conditions into the plan. These waiting periods vary according to the type of disease.
Conclusion
Going through the full depth of the terms and conditions is an extremely important step before buying any insurance plan. Failing to do so can lead to a claim denial in the future which will ultimately destroy the purpose of a term life insurance policy. Moreover, providing the right information to the company at the time of purchase and paying your premiums on time will save your family from facing any rejections if someday you are not with them.
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