Check policy wording, seek written confirmation from insurer

Coverage varies across insurers and products, may require a rider, and could come with loadings

- HIMALI PATEL

The recent blast near the Red Fort in Delhi has highlighted the need for insurance buyers to understand whether their term, health, and home insurance policies cover terrorism risk. Buyers should not take coverage for granted and instead verify policy wording.

Term insurance

Most term policies cover death due to terrorism. “Exclusions apply only in exceptional cases, such as death occurring due to active participation in war, rebellion, extremist activity, or illegal acts — not for innocent civilians caught in an attack,” says Bhavna Verma, chief and appointed actuary, IndiaFirst Life Insurance.

Pradeep Funde, senior vice-president, Anand Rathi Insurance Broking, informs that some older plans excluded terrorism. Most term policies cover it in the base policy (no rider required). The policy must be active (with premiums paid) at the time of the incident.

During purchase, the buyer must disclose if they are in a high-risk job. “Certain high-risk professions or postings — combat roles, hazardous occupations — require declaration so risk can be assessed properly,” says Shilpa Arora, cofounder and chief operating officer, Insurance Samadhan. Lack of disclosure could lead to problems at claim time. Verma informs that these in high-risk professions, such as military personnel, security contractors, divers, pilots, miners and oil-rig workers may be excluded or charged extra.

Coverage may be rejected or premiums increased for those working in high-risk areas. Those travelling to war zones, conflict areas, or sanctioned regions may also face higher premiums.