What is covered and what is not covered in Life Insurance?

Life Insurance comes to the rescue of people by protecting their family against financial problems in case of unfortunate death of the breadwinner. Itprovides a sum assured which is decided based upon the premium paid by insured. It also offers a rider option in which one could increase the sum assured by increasing the premium amount. Thus, the insured could use the death benefit as per their needs.

Apart from providing all the required benefits to an individual, there are various cases in which insured are excluded as well. Below is the list which mentions cases covered and not covered in Life Insurance.

The list of cases covered in Life Insurance are:

1)       Natural Death or disease caused by Health-related Issues:

The death caused naturally is covered in life insurance. It could include some critical illnesses like heart attack, cancer, stroke,etc.

2)      NRI’s:

NRI's could also opt for Life Insurance. They could visit India and complete all the formalities, or they could send the form, and an Indian diplomat will be in contact with them.

3)      Smokers/Drinkers:

Life Insurance also covers smokers and drinkers. All one needs to do is to pay an extra premium than others. Also, there is no differentiation made between occasional smoker and regular smokers, and a similar case is for drinking. If you smoke or drink, you are considered under this category, and you are bound to pay a higher premium.

4)      Death caused due to an accident:

There is an additional benefit for death caused due to accidents in most of the policies. Thus they can get death benefit along with accidental death benefits.

5)      Monthly Bills and everyday expenses or end of life expenses:

After an insured person’s death, your family member could enjoy financial benefits of paying monthly bills and day-to-day expenses.

6)      Co-signed debts:

If you have debts in your name, then even if you die, that debts will remain and will be passed on to your family. In such a case, life insurance comes as a saviour.

7)      Children’s education and Dependents Care:

There are various plans which ensure that children's education or childcare or dependent care is not hampered.

The list of cases not covered under Life Insurance are:

1)      War:

If there occurs some war and there are death caused due to this war, then in such case Life Insurance is not covered, no matter if the war is declared or not declared.

2)      Military service:

If you are working for military serviceor your job is life risky, then you are not covered under Life Insurance. E.g., Naval force, air force or civilian force

3)      Suicide:

In a few policies, it does not cover suicide, which is within two years from issuing date of the policy. Also, many of the plans don't include suicides.

4)      Fraud application or incorrect details found during the policy period:

If found guilty of entering false information or misleading information, then that is considered as fraud. Such fraud applications are not entertained in the case of Life Insurance.

5)      Tsunami or Natural Calamity:

      Natural calamities are usually not covered by Life Insurance. But if proper riders are taken for such cases, then it could be covered.

6)      Self-inflicted injuries or Homicide:

If death is caused by harming our body or if the nominee is found guilty of some crime, such cases are not covered by Life Insurance.

7)      HIV/AIDS

Sexually transmitted diseases are also not covered under Life Insurance.

It is always essential to read terms and conditions properly before purchasing any life insurance policy. This is to ensure that we are covered and we make a plan that satisfies our requirements and we receive appropriate claims.