A life insurance policy does not have a war clause if the insured is killed during a time of war

However, read your policy’s fine print as there could be certain exceptions. Also, add-on covers aren’t usually allowed.

March 07, 2022 / 08:01 AM IST

An anti-war protest. In some life insurance policies, war is listed as an exclusion.

With an Indian life lost in the war-hit region of Ukraine, a concern that has been rising among Indians is whether life insurance covers would honour claims for death due to an act of war.

While we don’t have an immediate reference of such past events, insurance companies are clear that the death claims would be accepted, even though the same wouldn’t hold true for student travel insurance and other general insurance covers.

Life insurance companies offer covers that are linked to the probability of a person living and the risk of income loss is assured. But general insurance companies provide insurance for property, vehicles and valuables, and against occurrences of fire and health incidents, loss during travel, death or disability due to personal accidents and even cyber insurance.

Moneycontrol spoke to insurance experts to comb through the fine print, if any, and allay fears.

Tarun Chugh, MD & CEO, Bajaj Allianz Life, says, “In a situation of war, all life covers offered by our industry continue. There is no war exclusion clause that kicks in. The industry ensures that any claims arising due to such crisis or natural calamities are picked on priority and provide all the support the family members of the policyholder may require.”

Events not covered

Terrorism, war and natural disasters are events that can result in major loss and various exclusion clauses are mentioned in an insurance contract. But so far Indian insurers have expedited the claims process during floods, earthquakes and the recent pandemic too.

In fact, pandemics too are force majeure events and claims arising during such a period can be declined. However, the Insurance Regulatory and Development Authority of India (IRDAI) had asked the industry to pay claims arising during the COVID-19 outbreak. As per the IRDAI annual report for 2020-21, Rs 1,418.71 crore was paid against 21,304 claims due to the pandemic.

Whether the claims would be high from the Russia-Ukraine conflict and IRDAI would step in again remains to be seen. But here are some common claim scenarios assessed with respect to the death claim under life insurance.

My particular insurance policy excludes death due to war. Why?

In some policies, war is listed as an exclusion. That is because some insurance companies fear large claim settlements, say Naval Goel, founder of PolicyX.com. “These events have the potential to push insurance companies into bankruptcy as life insurance claims amount to crores of rupees. But not all policies exclude claims arising out of war. Some only decline claims due to suicide,” adds Goel.

My relative had a cardiac arrest during wartime due to stress. Can we submit a death claim for life insurance benefits?

Yes, the claim for death due to natural reasons such as coronary issues would be payable. “Insurance companies evaluate the medical and other reports of the insured person and also look at the cause of death. If the reason for death is mentioned as heart attack, then it would be payable. But if the reason for death mentioned is death due to war, then it wouldn’t be payable, if war is an exclusion under the policy,” says Ajay Sehgal, director of Delhi-based financial advisory Allegiance Financial.

I am a non-resident Indian and have settled in Ukraine for business reasons. The cover was purchased when I was a resident Indian. Will my life insurance cover be valid?

Life insurance purchased in India is valid for death globally. The residency status doesn’t negate the contract entered into with the insurer as long as the policy is in force and the premium has been paid. “The life cover offered by insurers is applicable even if the death occurs anywhere in the world. The heirs can submit a claim and even repatriate the money to another country,” says Sehgal.

Though war is generally an exclusion for most general insurance policies, life insurance policies are selective and do not have a blanket ban on all covers emerging out of a war.

I have an add-on cover of waiver of premium in case of disability or death on my insurance. Will I be eligible?

No, since these are add-on covers and because the sum assured is usually twice the normal sum assured they aren’t valid under the disability or death due to war clause. “Under our policies, claims emerging from Ukraine on lives insured in India would be payable up to the extent of the life insurance sum assured. However, the add-on covers that have been selected at the time of purchase may not be eligible due to the exceptional circumstances of war,” a life insurance official said, requesting anonymity.

I am currently in Ukraine to oversee my child’s medical college admission. I have a life insurance policy that I had purchased when opening a bank account. This is a group cover. Do you think it will be valid if something happens to me in Kyiv?

“The life insurance purchased would be a group policy issued by the bank. Since these policies are customised, you should check the master policy document and look for exclusions. If war or war-like scenario is not mentioned as an exclusion, then your claim would be valid,” says Goel.

Dmitry Rogozin, head of the state space agency Roscosmos, has said that large parts from the International Space Station could fall over India and China. As rare and far-fetched as the idea sounds, what if it actually happens and someone on the ground dies as a result of such an accident? Will the life insurance pay up?

Any damage to anyone residing in India due to the debris collapse would be termed as an act of God and the life insurance claim would be eligible as the event occurred away from the war zone, suggests an actuary of a private life insurance company. This is assuming, of course, that your life insurance company has listed wars as an exclusion.

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