Will life insurance pay after a fire? Here's what every family should know
Published by India Today
Abhishek Kumar's role: Quoted
Abhishek Kumar said a standard life policy pays for accidental deaths, including fires, if it is active and facts were disclosed honestly. He explained that an accident rider is not needed for this, noted the usual exclusions, and suggested adding personal accident and health cover.
What Abhishek Kumar said
Does a term life policy pay if the policyholder dies in a fire, or is a separate accident rider needed?
In my view, a standard life policy pays the full cover amount when death is caused by an accident, and a fire is no different. The conditions are that the policy is in force and that all material facts were disclosed truthfully when it was bought. Many families believe a separate accidental death benefit rider is needed before anything is paid. That is a myth: accidental deaths are covered by the basic policy on its own.
When can an insurer still reject a life insurance claim after a death in a fire?
The usual exclusions still apply. A claim can be turned down if the insured person died while doing something illegal, or while intoxicated; these exclusions are standard across insurers. An insurer can claim there was a lack of duty of care only in cases where someone deliberately ignored safety protocols. An ordinary victim caught in a fire should not lose cover merely because an inquiry later shows the building broke fire safety norms.
Apart from term cover, what other insurance should a family have for accidents and hospital bills?
I suggest families also take a separate personal accident policy, or add an accidental disability rider. It pays a lump sum, or a regular income, if an accident leaves someone permanently or temporarily disabled, which life cover alone does not address. Equally important is a family floater health policy with a large sum insured, so that long hospital stays and critical care can be paid for without eating into the family's life savings.
In our words, from what he said in the piece. General information, not personal advice.
More of Abhishek's views on insurance
After recent fire tragedies, the article explains whether life insurance pays when a policyholder dies in a fire. It clarifies that term plans generally cover such deaths, that a building's safety lapses do not usually affect a claim, when claims can be questioned, and why families should not rely on term cover alone.
Publisher source
Will life insurance pay after a fire? Here's what every family should know