Does your Indian life insurance policy cover you if you get stuck in a war overseas?

Hundreds of civilian casualties, including the lives of two Indians, have already been reported in the war between Ukraine and Russia. A question that many people with a life insurance policy with an Indian insurance company would like to know is whether their policies will work if an insured person dies in such a situation.

“Life insurance policies cover deaths regardless of where they occur. Therefore, deaths caused by Ukraine, such as the crisis or any other situation, are covered by life insurance,” says Abhishek Misra, CEO and Senior Director of Bonanza Insurance.

The only exclusion, that a term plan usually has, is in the event of suicide by the policyholder, that too within the first year of the policy. For example, LIC’s Tech Term Plan states that “This policy shall be void if the insured (whether sane or insane) commits suicide at any time within 12 months from the date the risk commences. , provided the policy is in force or within 12 months from the date of reinstatement, the Company will not accept any claims except 80% of the premiums paid (excluding any additional amount charged under the policy for underwriting decisions and rider premiums, if any) up to the date of death.”

This therefore means that there are no other major exclusions that may prevent beneficiaries from benefiting from life insurance coverage in the event of the death of their loved one in a Ukraine-type crisis. However, this does not mean that coverage will work in all situations.

When Life Insurance Coverage Depends on Residency Status

Many people go abroad temporarily, for example on vacation, on business trips, for meetings, seminars, exhibitions, medical treatment, to meet relatives, etc. While many other people go for a longer stay, such as students, employees, consultants, etc. The validity of your life insurance cover in a Ukraine-type crisis will depend on the residency status for which the policy is purchased, the nature of the stay abroad, the cause of death and the type of insurance policy. insurance you have purchased.

The residential status must remain unchanged: Term plans of Indian life insurance companies are not only purchased by Indian residents but also by NRIs. “Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) are eligible to invest in term insurance plans offered by India-based insurers. The NRI population also includes spouses, parents and children of people who have moved overseas to seek employment.The process of buying term insurance is almost similar for residents and non-residents,” says Rakesh Goyal, Director, Probus Insurance.

If the policyholder dies with the same residence status as indicated in the policy, the insurance cover will remain in force. This happens especially in case of short stays. “For a short trip, a natural death is generally covered regardless of where it occurs,” says Goyal.

Change of residence status during an insurance year to be declared: If there is a change in your residency status in the middle of a policy year, you should notify the insurance company to ensure there are no impediments to the effectiveness of your coverage life insurance. “It may happen that you take out temporary insurance cover as an Indian citizen, but have to move abroad due to employment or other reasons during the term of your contract. In such In this case, policyholders must inform the insurer of the plan to settle in a foreign country,” says Goyal.

Personal accidental life coverage may not work

If the death occurs in a war zone, personal accident insurance may not work. “War, invasion and hostilities are usually exclusions from a term plan, and one should check with their life insurance company in the event of a claim,” says Goyal.

For example, LIC’s Tech Term policy has a clause that allows it to waive the additional personal accident coverage taken out with the term plan if the event of death involves a war. LIC’s technical term plan states that “the company shall not be liable to pay the additional sum mentioned above (personal accident), if the death of the insured: is caused by injuries resulting from his participation in riots , civil unrest, rebellion,
war (whether war is declared or not)invasion, hunting, mountaineering, steeplechase, racing of any kind, paragliding or parachuting, the practice of adventure sports”.

Thus, if an insured has taken out such a temporary contract with a personal accidental endorsement to double the insured capital in the event of death by accident, then the insurance company will only pay the guaranteed part of the temporary insurance and not the additional capital insured against personal accident insurance endorsement.

Many parts of the world such as Iraq, Kuwait, Afghanistan, Syria, Libya, Yemen and many African countries remain plagued by continuous unrest. Reluctantly, many Indians are often caught in the middle of such a crisis. The loss of a loved one, in many cases the breadwinner, places unwanted financial stress on already grieving families. Its life insurance policy can ease the burden of these families somewhat as it can be a source of significant financial support for the beneficiaries.