Why you need term insurance?
It is always wise to take small but steady steps towards ensuring safety and financial security for your family in case something uncalled for takes place. To make it more clear, let’s take a small situation. You make sure you and every family member wear a helmet while riding a bike or nor to cross the road or a railway track with headphones on or while talking over phone. Similarly, you can also make sure that everyone is safe and they wear seatbelts while driving or does not engage in drunk driving. These are a few examples of small measures that you can take to ensure the safety of your family. This brings to an important question: what if you yourself are not around for your family all the time? One of the safest options for financially supporting your loved ones is through a term insurance plan.
Term insurance policies are flexible in nature and are affordable too and that’s the reason they are gaining huge popularity as investment options. With the convenience of buying it online, term insurance is something you must consider.
If you are hearing about term insurance for the first time, just know that on a yearly basis you just have to pay a particular premium amount, in return for which a sum is assured. In case some emergency befalls the family of the policyholder, the assured sum goes to the nominees appointed by the policyowner. If you have queries regarding “whether term insurance cover natural death” or not, be assured that it does. But you have to thoroughly understand what forms of death are covered and what are not covered.
Note: Compared to other life insurance policies, term policies are feasible only after the policyholder has expired and not if he/she outlives the policy term.
Benefits of term life insurance
One might ask what’s so special about term life insurance?
- You can get a lump sum amount in the event of policyholder’s death in normal life insurance policies but that has its own cost.
- A term life insurance provides coverage at an affordable price.
- In a term life insurance, you have smaller time frames that allow you to have a sufficient window in between each payment.
Types of death that are covered in term insurance
As mentioned earlier, one must go through the terms and conditions properly before having a term life insurance. Here is a list of the type of death that falls under a term insurance:
- Term insurance plays its role in accidental deaths. If the policyholder expires due to some accident, he/she gets additional coverage for that (in most cases).
- As this article primarily talks about term insurance’s function in case of natural death or any other health diseases, the nominees get an entitled sum and death benefit along with that.
- In most cases, suicide is not honoured in policy coverage, at least not within 12 months of policy buying. It varies from insurer to insurer on how they take suicides.
Note: Suicide clause for all the policies issued before 1st January 2014 states “If the life assured commits suicide within one year from the date of start of risk or date of revival if revived, whether sane or insane at that time, the policy will be void and no claim will be payable.”
For the policies issued after 1st January, 2014, if the policyholder commits suicide within 12 months from the initiation of the policy, the nominee is entitled to get 100% of the fund value of the policy. The nominee will receive 80% of the premium paid (in case of non-linked plans) for death due to suicide within 12 months from the day of initiation of the policy.
Types of death that are not covered in term insurance
Now that you know that term insurance cover natural death, let’s talk about the types of death that are not covered.
- In case the policyholder dies of drug or alcohol overdose, be it accidental or any other form, the insurer will not entertain any policy agreement.
- If a policyowner expires due to any sexually transmitted disease, the insurance company will not provide coverage under their policies.
- In case of self-inflicted injuries, the insurance claim will not be entertained by the insurance company.
- The insurance claim will be rejected right away if a death investigation reveals that the nominee was involved in some way or the other.
About The Author
Michelle Joe
Michelle Joe is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences, and express herself through her blogs. You can find her on twitter
