Types of Death Not Covered by Your Term Insurance Plan in UAE
By Atul Yadav
| Published: 26 October 2021 | Last Updated On: 23 November 2021
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We always strive to secure our possessions and, with life being the most valuable asset, having a life insurance plan is imperative. With dependent members, it becomes our sole responsibility to insure them from any unforeseen circumstances. For securing our lives, we get numerous options in the UAE. Among various plans, term insurance is one of the most affordable plans.
Being low-cost, it provides life security for a fixed tenure ranging between 5 to 35 years without any maturity benefits. However, the term plan promises a high death benefit if the policyholder dies during the active policy term.
Even though the term insurance plan protects against a range of risks and accidents, it excludes a few threats on legal and moral grounds. If a policyholder’s death occurs due to the insurance exclusions, the insurance company is not liable to pay any death benefits. So, before considering buying a term insurance plan in the UAE, you should read the offer documents carefully. The article below highlights various term insurance plans exclusions.
What Type of Risks Are Not Covered in the Term Insurance Plan?
The insurance benefits may encourage individuals to commit criminal activities or self-harm. Due to moral and legal obligations, the insurance providers do not include a few causes of death in the term insurance plan. The threats that aren’t included are called term insurance exclusions. The following are the various term insurance exclusions in the UAE.
Term Insurance Exclusions for Life Cover
The following are the causes of deaths not covered in the term life insurance in the UAE.
Self-Inflicted Death (Suicide) - The insurance providers do not secure the policyholder against suicidal deaths (whether sane or insane) if he dies within 12 months from the policy purchase date. It is so because a policyholder may commit suicide to remove his/her debt or other financial burdens with the insurance benefits.
Death Due to Involvement in Criminal Activities - In case of death due to criminal activities, the insurance company does not offer insurance benefits. During the investigation, if the company finds out the policyholder to be involved in any kind of criminal or terrorist activities, the insurance company rejects the claim. Additionally, involvement in civil commotion, invasion, war, mutiny and other similar activities would lead to an insurance claim rejection.
Intoxication - If the policyholder dies due to drug, alcohol or other sedatives abuse, the insurance company is not liable to pay the insurance benefits to the beneficiaries.
Death Due to HIV-AIDS - The insurance companies in the UAE do not settle claims for death due to HIV AIDS.
Homicide - In case of homicide (murder by a family member or a close acquaintance) and the policyholder dies due to an intentional act by the beneficiary, the insurance company would reject the insurance claim. Until the court’s final judgment, the insurance settlement is put on hold.
Death Due to Prior Medical Condition - While buying term life insurance in the UAE, you need to disclose your pre-existing medical conditions to the insurance company. If the insurer finds that the policyholder’s death occurred due to a prior medical condition that was not disclosed, the company won’t pay the insurance benefits.
Term Insurance Exclusions for Permanent & Total Disabilities
The term insurance plans also cover the policyholders against permanent and total disability due to accidents and unforeseen hazards. However, in a few cases, the insurance company does not provide disability benefits such as -
Self-Inflicted Injury Leading to a Permanent Disability- The insurance company does not cover a total permanent disability arising due to a suicide attempt or a self-inflicted injury. If the insurance company finds the reason for total disability to be self-induced, the insurance provider won’t settle the insurance claim.
Disability Due to Drug Abuse - If the policyholder contracts an issue resulting in permanent total disability due to alcohol or a non-prescribed drug, the company is not liable to pay the insurance benefits.
Unproven Brain Disease - Since the insurance companies require documented proof for claim approvals, a permanent disability due to mental, nervous, or psychiatric disorder without demonstrable brain disease would result in the rejection of your insurance claim settlement.
A Permanent Disability other than the Disclosed Disabilities - While buying a term insurance plan in the UAE, the company discloses a list of covered disabilities and their coverage extent. If the policyholder’s disability does not belong to the disclosed set, the insurance company is not liable to pay the insurance benefits.
HIV-AIDS Infection - During the total permanent disability claim, if the policyholder is diagnosed with HIV infection or its antibodies, the insurance company won’t pay the insurance benefits.
Term Insurance Exclusions for Terminal Illnesses
Terminal illnesses are life-threatening diseases that may result in the policyholder’s death in the near future if he is diagnosed with one. You can opt for a terminal illness add-on with a nominal increase in the premium cost. The following are the term insurance exclusions for terminal illnesses -
A Terminal Illness Not Covered by the Insurer - The insurance providers disclose the list of terminal illnesses covered under their term insurance plans. If the policyholder suffers from a terminal illness that the insurer does not cover, he/she won’t receive the insurance benefits.
Late Terminal Illness Reporting - If a policyholder is diagnosed with a terminal illness and does not intimate the insurance provider within the specified time, the insurance company won’t process the claim settlement. So, the policyholder needs to report immediately after getting diagnosed with a terminal illness.
Term Insurance Exclusions for Critical Illnesses
Critical Illnesses are similar to terminal diseases, but these involve a longer treatment period and cost you a fortune. The term insurance plans in the UAE provides security against various critical illnesses; however, there are few exclusions such as:
A Critical Illness Not Covered by Your Insurance Provider- If you suffer from a critical illness that your insurance company doesn’t provide coverage for, you won’t receive an insurance benefit. Before you buy term life insurance in the UAE, ensure to go through various critical illness covers.
Non-Disclosure of Information - If you buy critical cover term insurance in the UAE, ensure to disclose your lifestyle habits and drug uses. If the insurance company finds out the cause of death as a non-disclosed reason, then it would not provide the insurance benefits.
Late Critical Illness Intimation - After diagnosis, if the policyholder fails to report the critical illness within the specified time, the insurance provider would reject the claim. In most cases, the reporting time for critical illness is between 30 to 60 days depending on the insurance provider.
Other Term Insurance Exclusions in the UAE
Apart from the above exclusions, the company also excludes casualties due to the following reasons.
An Undisclosed Surgery or Treatment - An undisclosed surgery causing death or disability may nullify your term insurance coverage in the UAE. You need to inform your insurer about all the prior treatments and surgeries that may cause ailment and health issues.
A Pre-existing Condition -The insurance companies provide you with security against future uncertainties. If you possess a pre-existing medical condition, you need to disclose it to your insurer so that they may include or exclude the issue as per their company’s policy. Hiding a prior condition may reject your claim or nullify your term insurance altogether.
Casualties Due to Childbirth and Pregnancy Complications - Most insurance companies in the UAE do not cover pregnancy-related complications. It means that if the policyholder dies during pregnancy or at the time of childbirth, the insurer is not liable to pay the insurance benefits to the beneficiaries.
The Bottom Line
Term life insurance is affordable and provides adequate coverage to cope with unforeseen situations. However, the term insurance plan does not cover a few threats, and you should clarify this with your insurer before buying a policy. To buy the best insurance plan according to your protection needs, compare term insurance plans in the UAE and select a plan that suits your requirements. Also, ensure to disclose all your lifestyle habits, pre-existing conditions and more to get the precise quote and comprehensive life insurance coverage.
Atul has had a flair for writing ever since he started writing essays in school, which inspired him to subsequently opt for a career in writing. He loves to write about places he's been to (the list is endless) and financial products that can help people make a real change in planning their finances better.