Introduction to Term Insurance Exclusions
Term insurance is one of the most trusted financial tools to ensure that your loved ones are financially protected in your absence. But did you know not all types of deaths are covered under term insurance?
That’s right — insurance companies have specific exclusions. If the death falls under these categories, your nominee’s claim could be denied. This makes it crucial to understand what’s not covered in your policy.
What is Term Insurance?
Term insurance offers life cover for a specified period. If the policyholder dies within that period, the nominee gets the sum assured. But if they survive the term, no payout is made — unless the plan has maturity benefits.
Why Are Some Deaths Not Covered?
Insurance is based on risk calculation. Insurers exclude deaths that involve higher or unpredictable risks like suicide, war, or illegal acts. These exclusions help insurers price premiums more fairly and avoid fraud.
Importance of Reading Policy Exclusions
Many people skip the fine print. That’s a huge mistake. Always read the policy brochure and know what situations your policy won’t cover. It helps avoid disappointment later.
Key Types of Deaths Not Covered Under Term Insurance
Suicide Within the First Year
If the policyholder dies by suicide within 12 months of policy issuance, the claim is not paid. Instead, only the premiums (excluding taxes) may be returned — and only if mentioned in the policy.
Death Due to Participation in Criminal Activities
If someone dies while committing a robbery, smuggling, or any illegal act — the claim gets rejected. No benefit is payable for deaths occurring during criminal acts.
Death from Pre-existing Illnesses (Undisclosed)
If the policyholder had a disease but didn’t mention it while buying the policy — and later dies due to it — the claim can be denied.
Death Due to Intoxication (Alcohol or Drugs)
Deaths due to alcohol or drug overdose (unless accidental and proven) are often excluded.
Death During War or Terrorist Attacks
Most term policies do not cover war, rebellion, military action, or terror-related deaths. Some high-premium plans or riders may offer this cover.
Death from Adventure or Hazardous Sports
Adventure sports like bungee jumping, paragliding, scuba diving, etc., are considered risky. Deaths during such activities are usually excluded unless disclosed and covered via a rider.
Death Due to Aviation (Non-commercial Flights)
Pilots or passengers in private, military, or non-commercial aircraft are usually not covered unless stated in the policy.
Death from Pregnancy-Related Complications (Specific Cases)
Some term plans exclude deaths due to pregnancy or childbirth-related issues, especially if complications were known but undisclosed.
Suicide Clause in Term Insurance
One-Year Waiting Period
Most term policies have a suicide exclusion clause for the first 12 months. No sum assured is paid if death by suicide occurs within this period.
Return of Premium Clause
Some policies return the premium paid (minus taxes and charges) in case of suicide — if the policy is past the one-year mark.
Medical Non-Disclosure and Its Impact
Importance of Honest Medical Declarations
Be upfront about diabetes, hypertension, mental health issues, surgeries — anything relevant. Hidden info = rejected claim.
How Insurers Investigate Cause of Death
They examine hospital records, postmortem reports, medical history, and interviews with doctors and family.
Claim Rejection Due to Non-Disclosure
Even if the death isn’t directly due to the disease, non-disclosure can still be grounds for rejection.
Criminal and Illegal Acts
What Qualifies as a Criminal Activity?
Participation in riots, theft, assault, fraud, terrorism, or any unlawful act can lead to exclusion.
Real-Life Example of Claim Rejection
A policyholder died while evading police during a smuggling operation. Claim was rejected due to involvement in criminal behavior.
Adventure Sports and Risky Activities
Activities Considered Risky
Skydiving, rock climbing, mountaineering, scuba diving, racing, and similar sports.
Optional Riders for Adventure Cover
Some insurers offer adventure sports coverage as a rider for an extra cost.
Disclosing Your Lifestyle Habits
If you’re into risky hobbies, be honest. Hiding it might void your policy.
Death Due to War, Riots, or Terrorism
Most Policies Exclude War-like Situations
Includes war, civil war, rebellion, and insurrections — unless otherwise stated.
Riders That Cover These Events
Some high-end riders offer coverage for war or terrorism-related deaths.
Global vs Domestic Death Clause
Check if your policy covers deaths outside India or in high-risk countries.
Death Due to Alcohol or Drug Overdose
Accidental Overdose vs. Intentional Abuse
If proven accidental (e.g., drug allergy), the claim might still be valid. Intentional misuse usually leads to rejection.
Why These Cases Are Rejected
Because they’re seen as preventable or self-inflicted.
Importance of Full Disclosure During Application
Commonly Missed Disclosures
-
Smoking or drinking habits
-
Mental health issues
-
Family history of disease
-
Past surgeries
Consequences of Hiding Information
Claim rejection, even after years of premium payments.
Transparency Leads to Smooth Claims
Honest disclosures protect your loved ones from stress during claims.
What Insurers Check During Claims
Documents Required
-
Death certificate
-
Hospital and medical reports
-
Post-mortem or FIR (if applicable)
-
Original policy documents
Medical Reports & Police Verification
For unnatural deaths, police reports and postmortem are mandatory.
Investigation by Insurance Company
They may investigate to rule out suicide, drugs, or criminal involvement.
How to Avoid Claim Rejection
Be Transparent During Purchase
Disclose everything — health, job, lifestyle, family history.
Update Policy with Life Changes
Inform your insurer about job change, address update, new medical condition, etc.
Keep Nominee Informed
Your nominee should know about the policy and how to make a claim.
Riders That Expand Death Coverage
Accidental Death Benefit Rider
Gives extra payout if death is due to an accident.
Critical Illness Rider
Covers major illnesses and pays out lump sum on diagnosis.
Permanent Disability Rider
Covers disability due to accident or illness — even if not fatal.
Role of Nominee in Claim Settlement
Responsibilities of the Nominee
Inform the insurer, submit documents, follow up.
Documents Required from Nominee
Death certificate, ID proof, policy copy, claim form, etc.
Misconceptions About Term Insurance Rejections
Not All Deaths Are Rejected
If you’ve been honest and met conditions, most claims go through.
Most Claims Are Paid If Conditions Are Met
IRDAI data shows most term insurance claims in India are approved.
Knowing the Policy = Fewer Surprises
Take time to understand your policy — exclusions, waiting periods, and riders.
Conclusion
Term insurance is a safety net — but only if you know what it actually covers. Exclusions like suicide, war, intoxication, and non-disclosure can derail your claim. The key is simple: be honest, read your policy carefully, and stay informed. That’s the best way to protect your family from unpleasant surprises when they need support the most.
FAQs on Types of Deaths Not Covered in Term Insurance
1. Does term insurance cover suicide?
Only after the first 12 months. Before that, no death benefit is paid — only premiums may be refunded (if applicable).
2. Is death due to COVID-19 covered under term insurance?
Yes, COVID-19-related deaths are covered in most policies unless specifically excluded.
3. What happens if I die while doing adventure sports?
If your policy excludes risky activities and you haven’t added a rider, the claim may be denied.
4. Can insurers reject a claim if I was drunk at the time of death?
Yes, death due to intoxication is a common exclusion.
5. Will my nominee get the claim if I die abroad?
Yes, if the policy covers global death. But war zones or risky travel countries may be excluded.
Please don’t forget to leave a review.