There are certain exclusions in term insurance plan as not all situations are covered in an insurance policy. The insurance provider would investigate in case the policyholder’s unnatural death. The sum assured in the term insurance policy is not paid if the death of the policyholder occurs due to any of the following reasons:
If the insured commits suicide within 12 months of buying a policy or 12 months of renewing a lapsed policy, such a death would be excluded.
In case a critical illness rider is chosen, there is a survival period depending on the insurer’s policy terms. If the insured dies during this survival period, after the diagnosis of the critical illness, no rider benefit would be paid in such a case.
If you hide an important fact from the insurance company at the time of buying the policy and death occurs due to such hidden fact, the company can reject your claims. In that case, the policy would become null and void and no claim would be paid. Important fact is considered to a fact which impacts your risk. For instance, if you are a chain smoker and you do not mention your smoking habit at the time of buying the policy, you are said to be hiding an important fact. Later on, in case of death due to lung cancer, the company would find out that you hide your smoking habit. In such cases, the policy would be void and no claim would be paid.