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Is Accidental Death Covered in Your Term Insurance?
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What is Accidental Cover in Term Insurance?
Several policies cover some accidental deaths under the basic term insurance. However, for increased protection, you can purchase an accidental death cover along with your term plan.
This cover provides you with extended protection against unexpected event such as a car accident, slip and fall, drowning or other incidents beyond one’s control. Thus it will ultimately increase the chances of claim approval of your nominee.
This means if the policyholder dies due to an accident during the policy term, the full sum assured is paid to the nominee. However, it is essential to know which deaths the basic plan covers so that, accordingly, you can purchase an additional accidental death rider.
An accidental death rider provides an extra sum on top of the base policy amount, typically ranging from 50% to 200% of the original sum assured. This offers additional financial protection for unexpected fatalities. It also covers partial or total permanent disability resulting from accidents and manages medical expenses and loss of income.
Does Term Insurance Cover Accidental Death?
Yes, term insurance generally covers accidental death. In most term insurance policies, the death benefit is payable to the nominee regardless of whether the death is caused by natural reasons or an accident, as long as it happens during the policy term.
However, while most accidental deaths are covered, some policies have exclusions. For example, deaths caused by risky activities, intoxication or self-inflicted injuries may not be covered. It's always a good idea to assess your policy details using a term insurance calculator to ensure you are fully aware of what is included and excluded in your coverage.
Understanding the Accidental Death Rider in Term Insurance
How Does it Work?
Here is an example:
You purchase a term insurance policy with a base sum assured of ₹1 crore term plan and add an accidental death benefit rider worth ₹20 lakh. Now there are two scenarios of the claim:
- If you pass away due to natural causes, your nominee receives ₹1 crore.
- If your death is accidental, your nominee receives ₹1.2 crore (base sum assured + rider benefit).
What Accidental Deaths are Covered by Term Insurance?
1. Death Due to Drowning
Death caused by unintentional drowning in pools, lakes, rivers, or oceans is covered, provided it wasn’t due to risky or reckless behaviour like intoxication or violating safety protocols.
Suppose you drown in river during boating, the insurance company will provide coverage against it. However, they will conduct a thorough check to ensure that you have not violated any rule during boating and that you have followed all the necessary precautions. Only then will they approve your beneficiary's claim to your policy.
2. Death Due to Falling From a Height
The insurance company will approve your beneficiary's claim if you die due to falling from great heights. This might include falling from the rooftop or a cliff. However, they will conduct a stringent check to verify if it was indeed an accident or a part of any conspiracy. Additionally, they would require your post-mortem report to confirm the incident.3. Death Due to Road Accidents
Death caused by car accidents, motorcycle crashes, or pedestrian incidents involving vehicles is one of the most common scenarios covered. However, there can be various reasons behind such accidents, including rash driving, driving under intoxication or due to the mistake of other vehicles.
Although insurance companies provide coverage against accidental deaths, they stringently check whether you followed traffic rules while driving.
4. Death Due to Sudden Fire
Fire is a common possibility and can occur due to short circuits, fires, explosions, cylinder bursts or smoke inhalation due to accidental events are generally covered. If the burns are severe, they can even lead to the patient's death.
Under such circumstances, the insurance companies will approve your nominee's claim to the policies. However, they will conduct a thorough check to verify whether the fire was natural or someone planned it.
5. Death Due to Getting Bitten by Insects
There are several insects whose bites can cause confirmed deaths. If it becomes the cause of your sudden death, the insurer will approve your nominees' claim to extend financial support to your family. However, they will check if any hidden pre-existing medical conditions were behind the complexities.6. Death Due to Accidental Falls
Unintentional falls from heights, such as stairs, balconies or slippery surfaces resulting in fatal injuries leading to death, are typically covered. However, the insurance company will verify the circumstances to ensure it was an accident and not due to negligence or risky behaviour.7. Death Due to Workplace Accidents
Accidents at work, such as machinery malfunctions, falls at construction sites, or exposure to hazardous materials, are typically included. The insurance company will conduct a thorough investigation to confirm that all safety protocols were followed and that the accident was not due to violating workplace safety regulations.8. Death Due to Natural Disasters
Death caused by unforeseen natural calamities, such as earthquakes, floods, being struck by lightning, or landslides, is often included under accidental death coverage. The insurance company will verify the natural disaster's occurrence and ensure that the death was directly caused by the event.9. Death Due to Struck by Falling Objects
Accidental death caused by falling objects like tree branches, construction debris, or heavy items is covered. The insurance company will verify the natural disaster's occurrence and ensure that the death was directly caused by the event.10. Death Due to Plane or Train Crashes
Fatalities caused by commercial or public transportation accidents, such as plane crashes or train derailments, are covered. The insurance company will verify the details of the crash and ensure that the death was a result of the accident and not due to any other factors.What Accidental Deaths are Not Covered by Term Insurance?
1. Death Due to Suicide
Insurers do not cover the death that you deliberately bring on yourself. However, if you are suffering from depression, you must immediately consult a therapist to effectively deal with it. You can also practise meditation or watch motivational videos to resolve it effectively.2. Death Due to Adventure Sports
Undertaking adventurous sports results in an adrenaline rush and adds a thrill to your life. However, if any mishaps occur during such sports that lead to severe injuries, you might not be able to survive in extreme cases. Under such circumstances, if your beneficiary raises a claim for the policy, the insurer will not approve their claim.3. Death Due to Unnatural Causes
Most insurers do not approve your nominee's claim if you die due to any accidents caused during any illegal activity. This might include heinous crimes or death due to conspiracies that people often plan to acquire your wealth or for the purpose of revenge, etc. Thus, it will leave your family without any financial protection after your death.4. Death Due to Driving Under Intoxication
Driving under a state of intoxication is a grave crime that no one should commit. This can result in the loss of not only your own life but also the life of another individual who was not at fault. So, if your insurer finds that you were driving under the influence of alcohol, leading to an accident and subsequent death, they will reject your nominee's claim.5. Death Due to Overdose of Drugs
Taking drugs is another serious crime that insurers do not cover in a term plan. So, if you take drugs, and its overdose leads to your death, the insurance company will reject your nominee's claim to your term policy. Thus it will leave your loved ones without financial protection and exposed to a monetary crisis.6. Death Due to High-Risk Activities
Engaging in high-risk activities like skydiving, scuba diving, or racing can be exciting. However, these activities come with significant risks. If you die while participating in such activities, your insurance policy may only cover the claim if these activities are specifically included in your policy.7. Death Due to War and Terrorism
Deaths resulting from war, riots, or acts of terrorism are often excluded from coverage in many insurance policies. If you die due to such events, your insurer may not approve the claim, leaving your beneficiaries without financial support.What to Do in Case of a Claim?
If the policyholder passes away due to an accident, the nominee must file a claim with the insurance company. Here is the process:
- Inform the insurance company about the policyholder’s death at the earliest.
- Provide documents such as the death certificate, police report, port-mortem repost and proof of accident.
- Keep in touch with the insurer to track the claim process.
The claim settlement process is usually straightforward if all conditions of the policy are met.
FAQs about Accidental Death Cover in Term Insurance
Is death due to illness considered an accidental death?
Is a heart attack considered an accidental death?
How essential is an accidental death cover?
What types of deaths are not covered by term insurance?
Is death due to suicide covered by term insurance?
Are deaths from self-inflicted injuries covered by term insurance?
Does term insurance cover death while driving under the influence?
Are deaths from pre-existing diseases covered in term insurance?
What happens if the nominee is involved in the policyholder’s death?
Are deaths due to adventure sports covered in term insurance?
Does term insurance cover deaths from terrorist attacks?
If I already have health insurance with accident cover, do I need an accidental death rider in term insurance too?
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Disclaimer
- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
- All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
- Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.
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