Mr Anand Kumar is an IT professional who took a home loan of Rs 20 lakh against the term insurance cover of Rs 40 lakh. Within the policy term that is twelve months after the issue of the term life insurance plan term, due to depression, Mr Anand Kumar passed away. However, the liability of loan didn't pass away to the dependents of Mr Kumar. Rather, the term insurance company repaid the home as per the clause of suicide within the term policy as the insurer received this information of assignment policy before the demise date of Mr Kumar.
Suicide is one of the most common causes of demise between both age groups of 15 years to 29 years and 15 years to 39 years. As per the data of the World Health Organisation, the suicide rate standardized in India stands 16.4 per 1, 00, 00 for the women that are sixth highest in the world and 25.8 when it comes to men and ranks twenty-second. The common reasons behind suicide could be mental illness, lifestyle ailments, and financial debts, so forth.
The Insurance Regulatory and Development Authority of India has amended the clauses of suicide for the term life insurance plan that is bought after 2014. The term insurance policies that have were issued before 2014, January 01 the nominee will not receive any death benefit in case the insured passes away due to suicide.
A term life insurance plan not only covers suicide but also helps the insureds’emotionally distraught family financially simply by paying back some amount of the premium. This also depends upon the terms and conditions mentioned in the policy. The term plans that were issued from January 01, 2014, do provide a suicide death cover to the family of the policyholder that is subjected to the listed below terms and conditions:
There are certain exclusions to coverage of suicide within a term life insurance plan. The claim might be rejected by the term insurance company under the following circumstances:
Wrapping it Up
Suicide is never the right decision and it shows an individual’s inability to fight against the odds. Live for the well-being and sake of the loved ones no matter what.
If a policyholder thinks that a term life insurance plan will remove all the financial worries and woes of the family by taking the extreme step of committing suicide, then it should be thought over that the death benefit will be payable to the family will still depend upon the guidelines of the term insurance company wherein the chances of rejecting the claim is high.
It will be a double whammy for the family, which they might not be able to withstand. Therefore, before taking any such drastic step do think about the future of the family. Committing suicide is one of the most craven act of life.
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