Investing in a good term plan is certainly a crucial investment option to safeguard your family’s future in the event of your unfortunate demise. These plans offer a financial corpus to your chosen nominee in case you die during the policy tenure.
With the offered corpus of money, your family and dependents can manage their daily expenses and sustain a proper lifestyle without having to depend on anyone for monetary help. It may also help your family bear your burial or funeral charges.
The core principle of this plan is that you just need to put aside a small portion of your present monthly income, which will be accumulated to generate a financial corpus that will be offered to your family in case of your unfortunate demise.
When a situation is as critical as the death of the primary breadwinner, the financial corpus provided by a term plan is the only light of hope for the surviving members. To make sure your family makes the most out of your investments, you must choose a trusted and reliable insurance partner.
Several things are not covered by term plans, but some insurance companies often make false claims for these plans. This manipulates you to purchase a term life insurance policy without knowing exactly what it covers.
To make sure that you stay safe from such claims and enjoy the policy benefits, we’ve shared some of the most common false claims for term life insurance plans that you must keep in mind while purchasing a policy.
1. Death Due to Terminal Illness
Certain diseases can easily cause the death of a person like HIV, a specific type of diabetes, fourth-stage cancer, or any rare disease. If someone claims that a term plan covers you against terminal illnesses, you should straight away know that it’s a false claim.
These kinds of diseases are not covered in term insurance and you won’t receive any financial help in case you’re diagnosed with any such disease. In case you have any existing conditions, you may explore rider opportunities available within your plan to prevent claim rejection.
2. Death Due to Natural Calamities
Natural calamities like earthquakes, drought, or flood are considered Acts of God and in case you die due to such calamities, the insurance company cannot be held liable to provide any term life insurance policy benefits to your nominee. It is your responsibility to inform your chosen beneficiary about this fact because even if they try to claim the policy in such cases, it will be rejected straight away.
3. Death Due to Terrorist Attack
If an insurer claims that death due to a terrorist attack is covered under a term plan, then they’re surely making a false claim. If you die due to a terrorist attack, your beneficiary won’t be able to gain the policy benefits as such cases are not covered under a term policy. Not only term plans, but even the most comprehensive insurance plans don’t protect you in such cases.
4. Death Due to Accident
Unless you have added an accidental death rider to your policy, death due to an accident is not covered in a term plan. An untrusted insurer might make a false claim that death due to an accident is covered under a term life insurance plan, but the reality is that you need to include the available rider for it.
5. Death Outside the Country
If you are traveling in a foreign country and die due to unforeseen circumstances, your nominees won’t be able to gain the available death benefit. This commonly happens when you’re diagnosed with a terminal illness and travel outside the country to gain treatment.
However, keep in mind that doing so deprives your dependents of availing of any benefits offered by the policy in case of your unfortunate demise in a different country. In case someone claims such deaths are covered, simply walk away.
6. Death Due to Critical Illness (Without rider)
Again, if you don’t have added any critical illness rider to your term plan, then your nominee won’t receive any benefits in case you die due to any critical illnesses. It is always necessary to let the insurer know about any preexisting health conditions.
There are several critical illnesses that may cause the death of an individual. However, they’re not covered in a life insurance policy by default. You need to add a critical illness rider to your policy to be able to gain coverage in such a case.
7. Death Due to Undisclosed Disease or Habit
If you hide certain facts about your life from the insurance company such as whether you smoke or not, you take part in risky hobbies, or anything else, then there’s a high chance of getting the claim rejected in case you die due to such habits.
Additionally, in case you have any pre-existing medical condition that you’ve kept hidden from the insurer and God forbid you to die due to the same, your nominee still won’t be able to get the claim approved as it is not acceptable to hide facts from the insurance company.
When you purchase a term policy, you may already have certain objectives associated with it. The most crucial reason why you must purchase a term life insurance policy is to cover your life for a better future for your family and dependents.
However, if your nominee is unable to get the claim approved, the policy will be worth nothing at all. Therefore, make sure you go through the terms and conditions associated with your policy available in the documentation.
It will make sure that you’re well versed with all the risks and challenges in your term plan and know what is not covered under the policy. This will greatly reduce the chances of getting your claim rejected and enjoy the policy benefits.