Types of death covered in 2 crore term insurance plans

In today’s world of unpredictability and rising inflation, having term insurance with a huge sum assured is crucial. You see, getting an appropriate cover amount with your term insurance plan is essential to secure the future of your loved ones after you are gone. A popular policy that satisfies both the parameters of offering financial security for your family and a huge cover amount is the 2 crore term insurance plan. In this article, we will cover the types of death covered in term insurance  with an INR 2 crore death benefit.

What is a 2 crore term insurance plan?

A 2 crore term insurance plan is a term life insurance policy featuring a sum assured amount of INR 2 crores. In other words, if the policyholder passes away within the plan term, the nominee will receive a death benefit of INR 2 crore, which they can use to maintain their lifestyle and handle any financial obligations that are to come. The massive sum assured of INR 2 crore ensures your loved ones stay financially afloat even after you are gone. And if you take factors like inflation, existing debts and liabilities, etc., into account, this term insurance plan stands out as quite future-proof.

Types of death covered in term insurance with an INR 2 crore sum assured?

As you know, the payout offered under the 2 crore term insurance plan is issued as a death benefit. Meaning, that the sum assured is paid to the beneficiary only in the event of the tragic demise of the policyholder within the plan’s term period. 

Now that you understand this aspect, let us take a look into the types of deaths that are usually covered under a 2 crore term insurance plan;

• Death due to natural causes

In the event that the life assured dies due to natural causes, such as old age or some medical-related conditions, the 2 crore term insurance plan offers the INR 2 crore payout to the nominee of the policyholder. 

• Death due to accidents

Deaths arising out of accidents are also covered under a 2 crore term insurance plan. Life is very unpredictable, hence investing in a term insurance plan with a huge cover can be ideal, especially if you have dependent family members or existing financial obligations.

• Deaths due to natural disasters

Deaths caused by natural disasters, such as floods, tsunamis, earthquakes, etc., are usually covered under the 2 crore term insurance plan. So, if the life assured dies in such an event, their beneficiary will receive the death benefit of INR 2 crore.

• Suicidal deaths

As it mainly varies from insurer to insurer, even from plan to plan, deaths due to suicide may or may not be covered under the 2 crore term insurance plan. In the case suicidal deaths are covered, certain conditions have to be met. For example, if the life assured passes away from suicide after 12 months of purchasing a new or reinstating a lapsed plan, the coverage will be applicable. 

What type of deaths are not covered under a 2 crore term insurance plan?

Now that you know the types of death that are covered, learn about the types of death that are not covered under the 2 crore term insurance plan;

• Suicidal deaths within 12 months

For example, if the life assured commits suicide within the 12-month period of purchasing a new or reinstating a lapsed plan, the 2 crore term insurance plan will not offer any death benefit. In such cases, the nominee may only receive a certain percentage of the total basic premium paid till the date of the death.

• Death due to AIDS/HIV

Most term life insurance plans in India don’t offer coverage for deaths caused as a result of HIV/AIDS. However, there are some plans that may offer death benefits in case of deaths due to AIDS/HIV, so make sure to do your research and check plan terms and conditions carefully before purchasing. 

• Death while being under the influence of intoxicants or illegal substances 

If the life assured is under the influence of illegal substances or intoxicants, like drugs, alcohol, etc., and dies due to it or while being under such influence, such death will not be covered under the 2 crore term insurance plan. Usually, insurers don’t offer term plans for individuals with major alcohol or drug addictions.

• Homicides 

Homicides are usually covered under term insurance plans, however, there are certain exclusions to take note of. For example, the 2 crore term insurance plan will not offer coverage if the insurer discovers that the beneficiary was involved in the murder of the policyholder or if the murder was carried out solely to acquire the sum assured payout.

• Death due to an undisclosed illness

It is crucial to be transparent with the insurer about medical health at the time of purchasing a 2 crore term insurance plan. If the life assured dies due to a pre-existing illness that remained undisclosed, the insurer has the right to reject the insurance claim.  

Conclusion:

This has been a brief insight into the types of death covered in term insurance plans featuring INR 2 crore sum assured. It is vital to understand what types of deaths are covered and excluded from the plan before plan purchase, so make sure to go through the policy wording carefully.