Does Term Insurance Cover Natural Death?
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Term insurance covers all types of deaths that might fall under Accidental, Illness or Natural death. All of these are natural causes of death and can cause significant financial distress to the dependents and family. Thus, term insurance certainly helps in these cases by providing the money the family needs to meet their life goals and needs. But it does not cover all conditions of the death that may happen under these heads.
Is term insurance applicable for natural death?
Yes, Term insurance usually covers natural deaths caused by diseases or medical conditions, like passing away in sleep due to a heart attack. If such events occur, the insurance pays the sum assured to the nominees. It's crucial for policyholders to carefully read and understand their policy terms to ensure coverage for intended situations.
How Does a Term Plan Covers Natural Death?
If your definition of natural death includes only death due to old age, most life insurance policies will cover this kind of natural death. For example, consider that most term policies offer life cover till the age of 80. The average life expectancy in India has been growing consistently over the last 50 years. If the trend continues, average life expectancy will be close to 80 years over the next 50 years.
Is Suicide Covered Under Term Insurance?
As per the term policy conditions, death due to suicide is not covered within the first 12 months of the policy tenure. However, the insurer may return up to 80% of the premium received for the cover.
For the period after the 12-month limit is over, we should look at other conditions under accidental and illness-related deaths.
Conclusion
In other words, your family will receive the death claim benefit, even when you live a normal life and only die of old age. So yes, modern term insurance plans do cover natural death.
Also Read: India's Long-Term Investment Plans
