Is life insurance premium payout available if I die abroad?

Written by : Knowledge Centre Team

2021-08-02

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If you travel frequently, you may be curious to know the answer to the question, "will my life insurance payout if I die abroad?" The answer is complicated and dependent on various factors. Each life insurance policy is unique when it comes to coverage, and it's always best to be prepared than to be sorry. And for the very first step, it is always advised to go through the fine print of your life insurance policy before going abroad.

In most circumstances, if you have had insurance coverage for about two years, you should be covered. Yet, several conditions might render your coverage void.

Life insurance payout for insurance policies of India

As per a report by Statista, India's life insurance penetration rate has grown to 2.82 percent in recent years. All life insurance policies offer global coverage to the insured in India, which means your life insurance payout will be given even if you die abroad. However, here are a few things to keep in mind concerning India's policies:

a. When a policyholder dies while traveling abroad, the nominee becomes entitled to the policy's insurance payout. The insurance amount, on the other hand, would only be accessible in India.

All paperwork, such as the claim form, death certificate, and official documents, must be presented to the insurer in India. The insurance payout will be paid in Indian rupees. An insurance applicant is required to complete a traveling questionnaire by insurers.

b. This is so that you can figure out what kind of danger they're dealing with. Executives who regularly travel to places like Pakistan, for instance, may be deemed high risk. Insurers may turn down a claim proposal like this. Nevertheless, if a life insurance policy is issued, it is for a global cover.

You'll need to fill out a nomination change request form if you wish to modify or add a candidate. Each insurer has its form, but in general, you must state the nominee's name, address, and date of birth, as well as your connection with the nominee and part of the nomination.

c. The insurer may request verification of the nominee's birth date and your relationship with him/her. If the candidate is a minor, the insurer will request an appointee to act on the minor's behalf.

Instances where your insurance payout might not be paid

The following are examples of circumstances under which your beneficiaries may be unable to receive the life insurance payout:

1. Dangerous activities

If you die while engaging in a dangerous activity, you may not be covered, depending on the circumstances and insurance. Risky activities include leisure interests with a higher risk of injury or death, such as:

Scuba diving
Base jumping
Hang gliding
Auto racing
Aviation
Rock and mountain climbing

Working as a logger, pilot, offshore oil rig worker, offshore fisherman, or underground miner all fall under the heading of dangerous occupations.

You may still get a life insurance policy if you engage in dangerous activities for fun or business, but the rates may be higher. In addition, depending on how dangerous the activity is, your insurer may include an exclusion in your policy that prevents payouts if you die while doing such activities.

Inform your insurer about any dangerous activity you do throughout the application process. Otherwise, your insurer may terminate your plan or refuse to pay the death benefit if you don't follow the rules.

Know what do term insurance plans not cover.

2. Murder

If your beneficiary kills you or is indirectly connected to your murder, they will not get the death benefit under the "Slayer Rule." Instead, your insurer will pay your death benefit to your dependent beneficiaries or heirs.

3. Suicide

Suicide is often covered by life insurance. However, during the first two years of most policies, there is a "suicide clause"—also known as a contestability period. Suicides committed within this period are not covered by life insurance.

For example, if a policyholder dies from a drug overdose at this period, things might become complicated. In this situation, the insurer would have to show that the overdose was deliberate to deny the death benefit.

Learn how does a life insurance pay for suicidal death in India.

After getting familiar with the answer to your question, "will my life insurance payout if I die abroad" it is not wrong to say that you might be willing to look for life insurance coverage that provides you exclusive benefits at the most reasonable cost. Explore your options to choose the best life insurance plan and secure your finances.

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