Concerns regarding mental health may not always be evident as a physical injury usually is, which is why they often get ignored. The demands of the current times, such as having to deal with a challenging job, fulfilling familial duties, and other social obligations, can often become overbearing.
The outbreak of an unprecedented crisis in the form of a pandemic further leads to anxiety and accelerate concerns such as depression. Mental and emotional wellbeing lies at the foundation of every achievement in life and seeking help to improve it is an essential investment for the future.
In such uncertain times, having a comprehensive term plan cover can contribute to mental peace. A term insurance plans ensures the financial security of yourself as well as your loved ones from uncertain eventualities in life.
What is a Life Insurance Term Plan?
A term life insurance policy provides coverage for a specified, pre-determined tenure. It is the purest form of life insurance policy that promises comprehensive financial protection to your loved ones in the unfortunate event of your untimely demise. In case the policyholder passes away while the policy is in force, the nominee is paid a lump sum life insurance death benefit. Another good reason to buy term insurance is that a term plan cover comes with pocket-friendly premiums.
How does a Term Plan Work?
When you buy a term life insurance policy, the insurance company determines the premiums based on the amount of the life insurance death benefit and other factors such as the policyholder’s age, gender, and health. The health of the insurer is often inspected through a medical examination.
If you die while the policy is active, the nominee receives your life insurance death benefit, which is exempted from taxes. However, if the policy expires before the insurer passes away, there is no pay-out. You can renew your term plan cover, but the premium amount will be recalculated basis your age and health at the time of renewal.
Is Suicide Covered in Term Insurance?
There may be several causes for mental and emotional exhaustion, such as mental illness, lifestyle ailments, financial debts, and so forth, which can become overwhelming. Choosing the right life cover term plan can help ease these mental concerns and provide some peace of mind. However, before you buy term insurance, it is essential to be aware of the terms and conditions and the fine print of the policy to avoid any unpleasant surprises in the future.
Life insurance term plan not only covers death by suicide but provides additional financial help to the emotionally distraught family by returning some of the premium amount paid. However, this depends on the terms and conditions of the policy.
Some of the clauses for the pay-out of life insurance death benefit owing to suicide are:
- The term plan cover for suicide is only applicable if the policyholder passes away after 12 months following the initiation of the policy. This step is to discourage the act of suicide if the individual is stuck in debt of finances.
- If the policyholder passes away due to suicide before the 12-month term, then no death benefit is paid to the nominee. However, the nominee does receive a specific percentage of the premium paid by the policyholder.
- If the death occurs due to suicide after the term of the policy has lapsed, then no death benefit is paid to the beneficiary.
- If any information has been concealed by the policyholder, then it might result in the rejection of the claim.
Types of Death Covered and Not Covered by Term Life Insurance Policy
The objective of a term insurance plan is to provide wholesome financial protection to your loved ones, even in your absence. However, it is important to be aware of the inclusions and exclusions in a life cover term plan to make an informed decision. Here is a list of the deaths covered and not covered by a life insurance term plan:
Types of Deaths Covered in a Life Insurance Term Plan
Types of Deaths Not Covered in a Life Insurance Term Plan
Natural death or death occurring due to health-related issues are covered by a term life insurance policy.
If the habit of smoking is not disclosed, and the cause of death is owing to smoking-related complications, then the death benefit claim can be denied.
If the cause of death is an accident, then the nominee is eligible to receive the death benefit. Additionally, with an accidental death benefit rider, an extra sum assured is paid to the beneficiary along with the basic benefit.
If death occurs while driving under the influence of alcohol, then the nominee does not receive the death benefit.
If the cause of death is suicide after 12-months of the policy purchase, the beneficiary will receive the life insurance death benefit.
If the cause of death is participation in any hazardous or adventurous activity, then it is not covered by your term life insurance policy.
Death owing to a critical illness is included in a term plan cover. If the policyholder has purchased a critical illness rider, the beneficiary receives an additional amount over the basic sum assured.
Death due to a natural disaster is not covered by your life cover term plan.
Recently, insurance companies have also included death due to pandemic-illnesses such as COVID-19.
If the cause of death is owing to childbirth or pregnancy-related complications, then these are not covered by a term plan.
Get Comprehensive Protection with Edelweiss Tokio Life Zindagi Plus
Edelweiss Tokio term insurance – Zindagi Plus is specially curated to provide comprehensive protection to your loved ones, even in your absence. With the inclusion of unique features, such as the COVID-19 cover and a Better Half Benefit, the Edelweiss Tokio Life Zindagi Plus term plan promises protection against unforeseen scenarios of life.
A term plan cover is imperative for securing you against all unforeseen eventualities of life. It is a crucial factor that ensures the future financial wellbeing of your loved ones in the unfortunate event of your untimely demise. However, before you buy term insurance, you must read all the terms and conditions carefully.
Neha Panchal - Financial Content Writer
Neha used to be an Engineer by Profession and Writer by passion, which is until she started pursuing full-time writing. She's presently working as a Financial Content Writer, with a keen interest in all things related to the Insurance Sector.