Things You Should Understand About Your Policy's Clauses and Exclusions

When an individual buys term insurance for housewife from a life insurance company, the two parties get into an agreement. In exchange for the policyholder's timely and regular premium payments as per the policy, the insurance company guarantees to pay the policyholder or their family a certain amount as stated in the policy document. Like every other policy document, the term life insurance also has several clauses as well as insurance exclusions that most people skip to look at carefully.

Let’s understand what are clauses and exclusions

Clause: A clause is an important part of the term life insurance plan because it contains a specific provision that protects both the policyholder and the insurance provider's interests. The provisions include specific conditions for payout and under which conditions the policy contract can be cancelled. 

Exclusions: Similarly, exclusions are clauses that specify what is not covered by the specific term insurance for housewife. If the policyholder chooses individual life insurance, his or her spouse will not be covered and needs to buy term insurance for housewife. In other words, it is up to the insurance company provisions, how many dependents are covered under their term life insurance monthly income plans, and whole life insurance plans. Just like this one, the exclusions vary from insurance company to company. 

Important Clauses and Exclusions to Be Aware Of

Let us now understand the major life insurance clauses and general exclusions in insurance plans that every policyholder should know about:

Grace Period: The grace period ensures that the policy will not be forfeited in case the policyholder misses a premium payment. Instead, s/he will be given a specific time frame to make the pending payment without incurring any penalties. The grace period typically ranges from 15 to 30 days, depending on the type of policy and premium payment mode they have chosen at the beginning of the term plan. In case, the policyholder unfortunately passes away during the grace period, the policyholder's beneficiaries will receive the sum assured after deducting the pending premium amount from their payout amount.

Free Look Period: The Free Look period is another clause that benefits the policyholder. The clause states that if the policyholder is dissatisfied with the term life insurance’s terms and conditions, they may return it for cancellation. The entire premium amount will be returned to the individual after deducting a few necessary charges. The charges include medical and fitness test fees, stamp duty, and the proportionate risk premium for that time period.

However, the policyholder should notify the insurer about the cancellation of the policy within 15 days of its issuance. If you choose a suitable term insurance for housewife and buy it online, the free-look period is 30 days. 

Revival Clause: The revival clause benefits both the insurance company and the policyholder. If a life insurance policy lapses due to non-payment of the premium amount, the revival clause allows the policy to be reinstated. The policyholder must pay the full amount of the premium due, as well as any applicable interest charges. In some circumstances, the insurance company may also require a new fitness and medical certificate from the policyholder to renew the policy. After all terms and conditions are met, the policy will be reinstated from the date of payment of the outstanding premium amount.

Suicide Exclusion Clause: Suicide as an exclusion is one of the most common life insurance clauses. The suicide clause states that if the life assured commits suicide within 12 months of their policy issuance, their beneficiary will receive 80% of the total premiums paid up to that point. Certain insurance companies may forfeit the entire amount in the event of such an unfortunate event. If the life assured dies by suicide after 12 months, the insurance company must pay the sum assured to the beneficiaries.

There are a few other clauses, including beneficiary nomination, assignment of rights in the policy and exclusions for additional riders or rider benefits. Nonetheless, it is important to be aware that the terms and conditions for each policy vary. There is a contestability clause that allows the insurance company to question claims filed by a policyholder's beneficiaries if the policyholder dies within two years of the policy's inception.

Does the exclusion vary according to the policy?

Yes, insurance exclusions vary between policies. Some policies do not cover spouses, while others exclude certain events, such as death due to an aviation accident. To get more comprehensive coverage, one can get riders and get protection for events such as aviation, personal accidents, and others. 

So, we are saying,

It is the policyholder's responsibility to read the terms and conditions thoroughly before purchasing the term life insurance plan. While it is very important to understand the benefits which your term insurance for housewife comes with, it is equally important to understand the exclusions. The individual should also review their policy every few years to ensure that all requirements are met. When making your decison before buying the policy, make sure that your plan covers the majority of the major risks and has minimal exclusions.