Term insurance is likely the easiest and cheapest way to make sure that your family will be financially secure after you’re gone. But, when buying the policy, most policyholders ask: Does the best term insurance cover death due to natural disaster or accidents?
One must get to know the coverage scope, especially during the era of climate change, pandemics, and the unexpected. Here, in this article, we demystify what’s typically covered, what isn’t, and what to look out for in the best term insurance policy to have full peace of mind.
Natural Calamities: Are They Covered Under Term Insurance?
Natural disasters like cyclones, earthquakes, and floods are intimidating because they are unexpected. Fortunately, the majority of term insurance companies cover death caused by accidents in their normal policies. The insurance is typically for a group of catastrophes like volcanic eruptions, landslides, and tsunamis. However, it is always best to study the terms and conditions carefully, as there might be exclusions or conditions applied to the payment.
For example, deaths indirectly attributed to an event, i.e., due to an underlying health condition worsened by the event, can be left out of a claim. Specific high-risk areas or regions may also include geographical restrictions or mandate riders. As always, simplicity and readability in the policy document are important when choosing the most suitable term insurance for maximum coverage.
What About Accidental Death?
Accidental death is typically explained as death occurring due to unforeseen, unexpected happenings without intention. The majority of term policies have them as the core policy, but there are some cases when they are utilised as an added rider to raise the benefit.
The following are some typical situations included:
- Road traffic accident
- Fires or explosions
- Occupational injuries
- Accidental drowning
Not many exclusions can be anticipated. Deaths from accidental causes involving alcohol or drug intoxication, from negligent pursuits like skydiving without initially disclosing, or by criminal acts will always be rejected by insurers. Therefore, one must ensure that accidental death is covered under the base product or as an add-on feature, and carefully read the terms before selecting the perfect term insurance.
Pandemic and Epidemic Clauses: The Post-COVID Reality
The COVID-19 pandemic changed the insurers’ strategy towards pandemics in infectious disease insurance. The majority of term insurance policies now cover death due to a pandemic, provided the policy was in force prior to diagnosis and a full disclosure was made at the time of purchase.
All of that being said, there are a couple of caveats to be aware of. Some insurers have a waiting period if you buy the policy in the middle of an active pandemic. Also, failure to report important information like recent travel or known symptoms will result in a claim being denied. These conditions are a reflection of the importance of honesty and transparency in attempting to get insured. If pandemic cover is something that is important to you, ensure it is included in the policy before purchasing the best term insurance.
Select the Best Term Insurance with Wide Eyes
Although all policies guarantee complete protection, only the top term insurance policies deliver it in every kind of real-life scenario. Natural disasters, accidents, and pandemics are usually covered, but not always completely or without exception. Read all the terms and conditions first, know the exclusions, and look at the riders offered. Informed today, your family will be financially secure, come what may.
