Here’s what your term plan might not cover

Term policyis designed to keep your loved ones financially secure in the case of your untimely death. Its purpose is to give you peace of mind over the inevitable, which are almost as good as outsmarting life and its uncertainties. A term plan is an affordable, smart way to ensure a financially secure tomorrow, today. But there are some events and conditions wherein the insurer may deny the benefits of the term plan to your loved ones and before you sign upon the dotted line, it’s worth it to know what these events and conditions are. This article will give you a basic overview of these instances which are better known as the ‘exclusions’ of your term plan.

Suicide:

Any death that’s deemed by the medical experts as a suicide or that was caused by self-inflicted injuries within the first year of the policy is not covered by any term policy. After one year, if the death is deemed as a suicide or is caused by self-inflected injuries, every insurance company has different terms and conditions in regard to the cover provided. Apart from suicide, if the death is caused due to the insured person’s participation in dangerous hobbies, then again the insurance company may or may not provide a cover, as prescribed in its policy documents.

Death due to terrorist attack and war:

Most insurance companies have exclusions against death caused as a result of terrorist activities. However, in most cases, the beneficiaries do receive the cover in the case of death by terrorism on humanitarian grounds after approaching the Insurance Regulatory and Development Authority of India. When it comes to death due to war, whether the war is declared or not, most insurance companies may not pay the assured cover.To be more specific, the sum assured may be denied if the insured’s death is caused from being engaged in any military, naval or police organization. 

Natural Calamities:

Again, this is something that not everyone knows, but insurance companies are not compelled to the sum assured in the case of natural calamities like earthquakes, tsunamis and floods. This is because in the case of such events, the death toll is very high and the claim amount will run in millions and in which case the insurance companies find it difficult to settle claims.

Lifestyle diseases:

If the insured person’s death occurs due to lifestyle diseases that occur from habits like excessive smoking, drugs or drinking, then the insurance company is not liable to settle the claim. The chances are higher when the unhealthy habits are kept hidden from the insurance company. But if you do declare your unhealthy habits, the insurance company can consider paying the claim in exchange for a higher premium.

All these exclusions and the extent to which they are applicable differ from one insurance company to another, if applicable at all. While some might not consider something as exclusions there might be another insurer that does! This only highlights the importance of reading the fine print. So if you are thinking of term policy, it’s a must to read, understand and scrutinize the terms of the policy before you sign your name on the dotted line.

Here’s what to look for in child insurance plans

 

Becoming a parent is one of the proudest moments in life. When a child is born, life is automatically filled with laughter and excitement and as parents; it’s an extraordinary feeling. But with its joy and happiness, parenting also invites a world of responsibilities. And fulfilling these responsibilities will take funds, lots of funds! It’s this question of funds that has a lot of new parents stressed. But, there is a way to take care of these responsibilities with ease and it’s choosing one of the many child insurance plans available in the market today.

A child insurance plan provides both an insurance cover as well as a great investment instrument. As parents, you can buy such a plan and start investing in it as soon as the child is born. And on adulthood, you receive a substantial payout that will provide your children a secure platform to achieve their dreams and follow their aspirations. What’s more is that there are child insurance plans that even allow policyholders to make periodic or occasional withdrawals before maturity of the plan. With child insurance plans you can systematically plan your child’s medical needs, educational goals and marriage expenses.

But before you decide to go in for a child insurance plan, make sure it provide you these four benefits.

Financial Protection:

A child insurance plan should provide your children financial protection in the unfortunate event of your death. Good child plans take care of your child’s every financial need, even in your absence, by providing a sum assured or periodic payments that will cover the welfare, medical costs and educational needs of your children.

Maturity Benefit:

Most child insurance plans provide maturity benefits when your child turns 18, 21 or 24. With maturity at these ages, child plans ensure that at the most vital junctures of your child’s life, the maturity benefit is available to give a platform to his or her dreams and aspirations. So when choosing a child plan, you should ensure that the amount you stand to receive on maturity is enough to cater to the plans you have sketched out for your kid’s needs. Make sure this amount also covers the cost of inflation.

Partial withdrawal facility:

The maturity benefit you receive when the policy tenure ends will help you provide finances for your child’s higher education, marriage, etc. But what if you need urgent funds before the policy matures? In that case there are numerous child insurance plans that provide you the option to withdraw funds from your policy partially, in order to meet any urgent requirement that arise. So it’s wise to look for child plans that offer this facility whilst looking for a policy for your child.

Look for riders:

Any child plans that provide you the above mentioned benefits are sure to provide you and your children a secure financial future. But if you’re looking to go one step ahead, you can look for child plans that come with additional benefits like surrender benefit, guaranteed bonus, etc. Further, one can supplement a child insurance plan with waiver of premium, income-benefit, personal accident benefit, critical illness and other additional riders.

These pointers will help you choose the right plan among all the child insurance plans available in the market and also help you make one more good decision as a great parent!