Term Insurance 394 views January 20, 2019

What Are The Different Types of Death Covered in a Term Insurance Plan?

The certainty of death adds to the feeling of insecurity in our uncertain lives. This explains the importance of term insurance that acts to financially secure in the event of the sudden death of a family’s breadwinner. Paying premiums towards a term insurance plan is like an investment that customers make to rid their loved ones of unforeseen financial crises stemming from death, disability or disease. However, not all kinds of deaths are not covered under term insurance.

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Listed following are the types of deaths covered under a term insurance policy. These include:-

Natural Death

Health-related problems are pervasive. An increasing number of people are dying of diseases or adverse medical conditions each year. Lifestyle habits, indifference to timely treatment, increasing pollution problems, etc. contribute to rising health disorders every year. While the most imminent reaction to death is grief, dependent family members struggle to come to terms with financial problems in the long run. Term insurance ensures that the nominee(s) of the policyholder(s) are assured a pre-determined amount that serves to take care of their monetary liabilities in the long run. As per the terms are written in the term insurance proposal, the insurance company is liable to pay death benefits (or sum assured) to the nominee(s) of their customers if they succumb to the effect of any disease.

Death By Accident

Accidental deaths are common. Latest details by the Ministry of Statistics and Programme Implementation reveal more than four lakh vehicle accidents in the country alone. As accidents claim lives or render victims seriously injured and permanently disabled every year, more people now realize the importance of term insurancemore than ever before. Also, some insurance companies avail their customers added rider benefits that can be bought by paying extra premiums.

Examples of accidental deaths include:-

  1. Death by accidents involving motorcycles;
  2. Accidental death involving machinery at work or due to accidents in factories
  3. Death by fire or fire-related injuries
  4. Death due to falling from an elevated area like the roof of a building
  5. Death due to slipping on the floor of the bathroom
  6. Drowning-related death
  7. Natural calamities like earthquake, tsunami, floods, etc. resulting in death
  8. Death due to electric shocks

Choose Term Insurance Policy Wisely

The reasons for deaths can be myriad and many. Before making your choice of term insurance plan, it is important to go through the details given in fine print. Buying term insurance is equivalent to ensuring prolonged financial security in place. Depending on the loans you have taken coupled with the extent of liquidity of the assets you have in place, potential liabilities of your loved ones, your current income levels, inflation rate, etc. you must choose the policy coverage amount. Also, it is important that policyholders inform and educate their nominees about the details given in the term insurance plan apart from acquainting them with the claim-settlement process.

Currently, there are many insurance companies in India selling term insurance plans.Term insuranceis a financial tool that is bought to secure. So, choose your plan wisely. The cheapest term insurance policy need not always be the best. Instead of comparing term policiesby their prices, one must look into the innate features and benefits characteristic to each plan. Also, not all riders may not serve your purpose. So, assess your needs carefully and pay for the rider that suits your needs and takes care of your dependents in your absence.

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