A life insurance policy covers accidental deaths, including those resulting from car accidents and motorcycle incidents.
However, if a policyholder dies due to an accident during such hazardous activities, the policy will not provide coverage for that death.
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What does Term Life Insurance Cover?
The term life insurance cover represents the sum assured that the policy will pay to the beneficiary in the event of the insured person’s death during the policy term.
It serves as the financial protection offered by the insurance policy.
How Much does Life Insurance for Motorcyclists Cost?
When purchasing or applying for life insurance for motorcyclists, various factors will be considered to determine your premium rates.
Standard factors such as your age, required coverage amount, chosen term (in years), and the purpose of coverage (mortgage or family protection) will influence your premiums.
Additionally, factors like smoking status will impact your life insurance premiums.
Beyond these, other considerations include health and medical history, lifestyle, activities (including motorcycle riding), and occupation.
Is it Possible for Me to Raise my Coverage in Term Life Insurance?
You can enhance your term life insurance coverage in India.
Term life insurance, which provides coverage for a set period and pays a death benefit if the policyholder dies during that time, allows for an increase in coverage.
To do so:
1. Reach out to your insurance company.
2. Evaluate your current policy.
3. Determine your updated insurance requirements.
4. Supply the necessary updated information.
5. Go through the underwriting process.
6. Adjust your premium payments accordingly.
Circumstances a Life Insurance Policy Withhold Payout
If your insurance policy remains active, and you have maintained regular payments, the insurance company will pay the death benefit to your beneficiary upon your death.
However, there are instances where the insurer might withhold the death benefit.
Engaging in Deception or Committing Fraud
Failure to disclose risky activities, health conditions, travel plans, or family health history during the application process may lead to the insurer denying the death benefit to your beneficiaries.
Concealing pertinent information on your application constitutes life insurance fraud.
To ensure a smooth payout of your policy, honesty and thoroughness during the application process are crucial.
Committing Homicide
If the beneficiary of a policy commits murder against the insured, they will not receive the death benefit, as the slayer rule prohibits payouts to individuals involved in the murder of the insured person.
In such cases, the insurance policy remains intact, and the death benefit is directed to contingent beneficiaries, also referred to as secondary beneficiaries, or to the insured’s estate.
Committing Suicide
Life insurance typically covers suicide, but there is a caveat: life policies include a suicide clause that restricts a payout for death by suicide within the initial two or three years of the policy, depending on the company.
Insurers implement suicide clauses to prevent individuals from intentionally taking their lives shortly after the life policy becomes active.
The specific duration of suicide clauses may differ among insurers, but it typically spans two to three years.
Engaging in Unlawful Activities
Certain life insurance policies exclude coverage for deaths that occur while the insured is engaged in illegal activities.
This exclusion may be applicable to specific crimes, such as felonies, but not necessarily to all.
The contestability clause may also be relevant in this context; if the death occurs after the policy has been in effect for two years, the death benefit might be paid out regardless.
Each insurer has its own policies regarding how to handle situations involving illegal activities. Your agent can guide you through any exclusions specified in your policy.
If You do not Designate Any Beneficiaries in Your Policy
Payout of the death benefit can be complex if you don’t specify beneficiaries in your life insurance policy or if your beneficiaries die before you.
In such cases, the funds go through probate court, a lengthy process that could take up to a year.
To ensure a smoother payout, keep your beneficiaries up to date and designate secondary beneficiaries who receive the benefit if the primary beneficiary is unavailable.
Engaging in Hazardous Pastimes
If you die while partaking in a risky hobby, like flying a private plane, bungee jumping, or scuba diving, your insurer may not pay the death benefit, depending on your policy details.
Activities with substantial risks could lead to policy exclusions, such as aviation exclusion riders for private pilots, resulting in no death benefit for beneficiaries in case of a flying accident.
Any exclusion riders on your policy will be known before it takes effect, sparing your loved ones from concerns after your passing.
What does Life Insurance Provide Coverage for?
Life insurance policies provide coverage for deaths resulting from illness, accidents, or natural causes.
As long as you steer clear of the exceptions outlined above, your beneficiaries will receive the payout upon your demise.
This includes:
– Natural causes such as heart attack, infection, kidney failure, stroke, old age, cancer, or any other natural cause.
– Accidental death, encompassing accidental drug overdose, motor vehicle accidents, poisoning, drowning, or any other tragic incident.
– Pandemic-related illness, with the coronavirus, for instance, considered a natural cause of death.
– Suicide after the two-year period covered by the suicide clause has elapsed.
– Murder, as long as your beneficiaries were not involved, regardless of the circumstances of your death or whether it is ruled manslaughter or homicide.
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