Life insurance covers terror risk, with riders

The recent terrorist attack in Baisaran Valley in Pahalgam, Jammu & Kashmir, which claimed 26 lives, has once again revived the spectre of terrorism.

- SANJEEV SINHA

In light of this, individuals must purchase insurance covers to protect their life, health, homes and vehicles.

Life insurance policies, including term insurance plans, provide coverage for death caused by a terrorist attack. "If a policyholder dies in such an incident, the nominee is entitled to receive the sum assured as long as the policy is active and the premiums have been paid," says Adhil Shetty, chief executive officer (CEO), Bankbazaar.com. Insurers treat death resulting from a terror attack in the same manner as death due to natural or accidental causes.

Exclusions, however, apply if the insured was found to be actively participating in terrorist activities, riots, civil commotion, or any criminal activity at the time of death. "Some policies might also exclude deaths in war zones, or from nuclear or biological attacks. But these are exceptions and not common in standard life insurance contracts," says Shetty.