Buying a term insurance plan is not enough. There are multiple term insurance plans available in the market. Selecting term insurance is not enough, you must also know what can be the challenges that can arise at the time of raising the claims. You must know thoroughly about what kind of deaths are not covered in the claims. If you don't know about the same then the entire process of buying a term plan will be Wild Goose Chase. Once you know about the types of deaths not included in term plan then you can plan about the ways to manage it in advance. This can minimize the risk of claim rejection due to such deaths as well.
Deaths Not Covered in Term Plans
1. Death Due to Natural Calamities
If a policyholder dies due to the natural calamity like earthquakes, floods, etc then such deaths can't be considered for taking a claim. You must stay aware of the same and also keep the beneficiary updated. If nominee plans to take a claim in such a scenario then it will surely get rejected.
2. Death Due to Terrorist Attacks
If an insured dies due to terrorist attack than such deaths can't also be claimed by the beneficiary. Though a policyholder can't ensure to safeguard against such death they can always stay alert. You can try to avoid public places during national holidays where there are any chances of terrorist attacks.
3. Death Due to Accident Unless Covered by a Rider
Usually, any death happening due to the accidents is not covered in the term plans. If you plan to cover such death than you must take a specific rider for the same. Unless you take a special accident rider you will not be able to cover the risk of life due to an accident.
4. Death Due to An Undisclosed Habit or Disease
It's very important that you disclose each and every detail related to life and lifestyle to the insurer. If these details later become the reason for the death of the policyholder than the beneficiaries’ claim will be surely rejected in such cases. Some such common cases are declaring smoking habits. You must also reveal any critical illness like diabetes or cancer to the insurer.
5. Death Outside the Country
If the policyholder is traveling outside the country and dies there than such deaths are not covered in the term insurance. International visits can be avoided if you are not well. However, at times, it must be unavoidable because certain treatments are possible only at the specialized hospital that might be located abroad. Insured must know that if they lose their lives in a foreign location than there beneficiary will be deprived of any claims. If you are informed of such a death clause in advance than the family is prepared for the same. If family members are not informed than the claim rejection in such scenarios may shatter them. The best thing a policyholder can do is follow the terms and conditions of term policy and keep family members aware of the same.
6. Death Due to Critical Illness without the Rider
To cover critical illness that may lead to death you must take a specific rider for the same. If you don't take cover for pre-existing or likely to occur critical illness then you may be a huge risk. First of all, if death occurs due to the critical illness then it will not be covered in the term plan. If the beneficiary plans to raise the claim against it then it will be surely rejected.
7. Death Due to Terminal Disease
There are certain illnesses that for sure can lead to the death of the policyholder. Some such diseases are fourth stage cancers, HIV, certain types of diabetes, some rare deadly diseases and many more. If a policyholder dies due to that kind of disease then it will not be covered in term insurance. You may explore the rider benefit against this kind of disease to prevent the claim rejection.
A term policy is brought with certain objectives. One of the most important motives of buying it is covering the financial risk related to life. Your term policy will be waste if your family can't avail of any death benefit. Before buying any term policy you must go through its terms and conditions thoroughly. It can help you stay updated about what are the associated risks and challenges related to a term plan. If you are aware of the same you can manage term insurance in a better plan. Try to take the riders according to the term plan only. Furthermore, every best term insurance policy has some unique inbuilt feature you must understand it completely to enjoy the maximum benefit and avoid any claim rejections. Moreover, it is advisable to first compare all the available options and then choose the right one as per your requirements. For the same, you can take the help of an online insurance web aggregator such as PolicyX.com which will assist you with free term insurance quotes.