Does your insurance policy cover death due to war?

The recent Pahalgam attack has shown that the threat to life is increasing with rising uncertainties in the world. While buying a life insurance policy, it is important to read the exclusions to ensure that your family and loved ones receive the death cover benefits easily. Earlier, most life insurance policies used to exclude deaths related to war and terror attacks from coverage. This has changed now. Many insurers have started including death due to war and terrorist attacks in their life insurance policies' coverage.

ET Wealth online decodes the latest life insurance policy exclusions and what you need to know when buying a life insurance policy.

Does a term life insurance policy cover deaths due to war or terror attacks?
ET Wealth spoke to several insurance experts. Here's what they say:

Kapil Mehta, co-founder of SecureNow, an insurance broking firm says, "In case of life insurance policies, most of them provide the death benefit in case of war and terror acts."

Concurring with the view, Varun Agarwal, Head of Term Insurance at Policybazaar, says, "Most term life insurance policies in India do cover death resulting from war or terrorist acts. These events are generally not excluded, which means nominees are eligible for the death benefit in such unfortunate circumstances. However, it's always advisable to check the specific policy wording or consult the insurer for clarity."

Anil Kumar Singh, Chief Actuarial Officer, Aditya Birla Sun Life Insurance, says, "All term life insurance policies of Aditya Birla Sun Life Insurance (ABSLI) include coverage for deaths of victims resulting from war or acts of terrorism. The policyholder should understand the difference between victims and perpetrators. If a policyholder is a victim of war or terrorism and the policy is active and in force at the time of the incident, the death benefit is payable. However, if the policyholder is involved in terrorist activities, resulting deaths are generally excluded from coverage."

Shilpa Arora, co-founder and chief operating officer at Insurance Samadhan, says, "As per the terms and conditions of major insurance companies, there are only three exclusions. Until 2001, deaths during war or terrorism were not covered, but today there is no exclusion. However, as a rule, policyholders must declare occupational risks, including working in a combat role. If an underwriter accepts this risk, whether at standard or increased rates, it has to be covered. On the other hand, if occupational risk is not declared, claims can be denied within the first 36 months; non-disclosure would not affect the claim."

Hence, all insurance experts advise policyholders to read the exclusions list before buying a life insurance policy.

Are the terms and conditions different for different life insurance policies from same insurer?
Agarwal from PolicyBazaar, says, "No, the terms related to death due to war or terrorist acts are generally similar across term and other types of life insurance policies. The insurer's underwriting typically governs coverage or exclusion of such causes of death."

Singh from ABSLI concurs, "No, the coverage terms for death due to terrorist acts are consistent across both term and other life insurance plans offered by ABSLI. In both cases, death due to a terrorist attack is covered by default, and no additional rider is required. However, death due to unlawful acts and involvement in terrorist activities remains excluded across all plans."

However, it may happen that while one insurer covers deaths related to war and terrorist acts, another insurer does not due to differences in their underwriting policies. Hence, it is important to read the policy conditions while buying the insurance.
Common exclusions in a life insurance policy
Many people don't read the exclusion lists carefully when buying a life insurance policy. Mehta says, "Generally, the only exclusion allowed in life insurance is suicide in the first policy year."

Agarwal says, "A key exclusion in most term insurance policies is suicide within the first year of the policy commencement. This one-year suicide exclusion helps prevent moral hazard and ensures the integrity of the insurance pool. Other exclusions may vary but can include death due to participation in hazardous activities, criminal acts, or substance abuse, depending on the insurer."

Arora says, "In the case of term insurance plans, suicide within the first policy year is a common exclusion across providers. As per Section 45, claims can be denied under non-disclosure, pre-existing conditions, substance abuse, involvement in criminal acts, and injuries or death due to participation in hazardous activities are among the other common exclusions. However, consumers must note that each insurance provider may have a different set of exclusions. This is why I urge everyone to review the policy document for exclusions."