Term insurance can be an excellent choice to secure the financial future of your loved ones in your absence. But can a term plan be effective if the insured person goes into a coma? Read on to learn the intricacies involved.
Sometimes, in life, unexpected events can occur and catch you off guard unannounced, and one such event is a coma. A coma can occur due to various reasons, such as accidents, illnesses, or brain injuries. It is a state of prolonged unconsciousness where the affected individuals cannot respond to their surroundings.
You may have purchased a term insurance policy to protect your loved ones in your absence. However, does that apply in such a case? What will happen to the term insurance policy in the unfortunate event of a policyholder slipping into a coma? Let’s find out.
First, What Is Term Insurance?
A term life insurance policy provides insurance coverage to the policyholder against a pre-defined premium. The premium payment term can range from a few years to several decades, depending on the policyholder’s needs and preferences. The insurer pays a death benefit to the nominees of the policyholder if the person dies during the policy term.
Term insurance can offer a higher amount of coverage for a lower premium compared to other types of insurance policies. This makes it an affordable option for many.
So, What Happens to the Term Plan if the Policyholder Goes Into a Coma?
As a general rule, a term plan remains in force even if the insured person goes into a coma as long as the premium payments are on time. This is possible if you choose the automatic premium payment mode, where the premium is automatically deducted from your bank account on a specific date.
Therefore, if the policyholder were to pass away during the policy term while in a coma, the nominees would receive the death benefit.
However, it’s essential to read the policy terms and conditions thoroughly and understand any exclusions. For instance, a term plan usually doesn’t cover deaths resulting from a suicide attempt during the first year of purchasing the policy.
Will The Term Plan Lapse?
A term plan may indeed lapse if the premiums are not paid due to any medical condition, including coma. However, you can take certain critical illness riders to make your term insurance effective against coma.
Critical Illness Rider
A critical illness rider is an add-on or a supplementary benefit that can be added to a life insurance policy, providing coverage for specified critical illnesses or medical conditions. You can opt for coverage against 37 different types of critical illnesses. The rider pays a lump sum benefit if the insured person is diagnosed with a covered critical illness or condition during the policy term.
So, the following two critical illness covers can make your term life insurance policy work even if you slip into a coma.
- “Coma of Specified Severity”
- “Loss of Independent existence”
No one should ever have to go through the turmoil of a medical condition as severe as a coma. However, a wise person always stays prepared for every unforeseen possibility of the future. Therefore, add optional riders to your term insurance and stop worrying about coma or other severe medical conditions.