Page 47 - Insurance Times August 2020

LEGAL

Is murder or suicide covered in insurance not lapse. "The claim amount will be paid to the legal heir
as per succession law. In case, there is no legal heir then
policies? Here are the exceptions the claim amount will be kept with court till a successor is
The concept of life insurance is simple. The policyholder pays located," says Shailesh Kumar, Co-Founder at Insurance
a premium each year and when he dies, the family receives Samadhan.
the claim amount. But, what if the policyholder is mur- Death by suicide
dered? Surely it adds to the complications in the claims
If the incident happens within a year of buying or reinstat-
settlement process.
ing the policy, the insurance company is not liable to clear
Delhi-based Narendra Singh (name changed) was going the claim. Suicide will only be covered if the policy period
home in a cab when he had a heated argument with the has entered the second year. However, some insurers such
cab driver. One thing led to another and the cab driver as Future Generali do have a policy to pay the nominee 80
strangled him. The driver claimed that Singh was drunk and per cent of the premiums paid as death benefit, if the poli-
used abusive language. Based on his statement in the po- cyholder commits suicide within a year of the policy issue
lice chargesheet, the insurance company rejected the in- date. Note that an investigation may happen to ascertain
surance claim, saying the deceased was under the influence if the nominee has instigated the policyholder to take such
of alcohol. a drastic step. If she has, the claim will not be cleared.
The deceased's son approached the insurance grievance Death due to participation in adventure sports
redressal firm Insurance Samadhan, and managed to get Next time you go bungee jumping, paragliding, car racing
claims amount of Rs 21 lakh after the post mortem found or other such adventure sports, you should know if some-
strangulation to be the cause of the death and no traces of thing were to happen to you, your life insurance policy will
alcohol. not protect the finances of your family. Accidental deaths
Had the deceased been drunk, the insurance company during adventure sports like skydiving, paragliding, bungee
wouldn't have cleared the claims as deaths due to the in- jumping, among others are not covered by insurance policy.
fluence of alcohol or drugs are not covered under the in- Death due to natural calamity
surance policy. There are many more such death cases Death caused due to a natural disaster or act of God like
which are covered generally, but have some exceptions. an earthquake or floods, is typically not covered by insur-

Take a look: ance. But, if you have opted for any particular rider for the
purpose or insurance regulator IRDA mandates that deaths
Death by murder due to this particular event will be covered, insurance com-
As the above case study shows, death by murder is indeed panies will have to honor the claim. "If IRDA declares that
covered under the insurance. All you have to do is provide claims are not payable during a pandemic or war-like situ-
the death certificate along with the FIR and post mortem ation only then companies can deny. Else companies are
report. But, if the nominee is involved in murder, it will bound to pay all claims," says Kumar. For example, claims
become a police case. Although the claim amount will still were settled for deaths due to floods in Kerala in 2018 and

The Insurance Times, August 2020 47