The ongoing Russia-Ukraine war has led to thousands including Indians losing their lives. With the war seemingly far from over, many Indians are now inquiring if their nominees would receive the insurance amount, pursuant to life insurance policies bought from Indian insurance companies, in the event of their untimely death.
Not many realise that life insurance policies cover deaths regardless of where they occur. As a result, deaths caused by the Ukraine-Russia crisis or any other situation are covered by life insurance. This does not, however, imply that coverage will be effective in all circumstances.
Residency status matters
There may be myriad reasons why many people may travel abroad. These include small vacations, business trips, meetings, seminars, exhibitions, medical treatment, and visiting relatives. Many others, including students, employees, consultants, and others, stay for an extended period of time. The effectiveness of your life insurance policy in a situation like the Ukraine crisis is determined by the residency status for which the policy is purchased, the nature of your overseas stay, the cause of death, and the type of insurance coverage that you have purchased.
Also, Indian life insurance companies sell insurance plans to both resident and non-resident Indians. Non-resident Indians (NRIs) and people of Indian origin (PIOs) can invest in life insurance policies offered by Indian insurers. The spouses, parents, and children of those who have relocated abroad in search of work are also included in the NRI population. The process of buying life insurance plans for residents and non-residents is nearly identical.
If the policyholder dies with the same residency status as stated in the policy, the insurance will continue to be valid. This is most common for temporary stays.
If your residency status changes in the middle of a policy year, you must notify the insurance company so that your life insurance coverage remains effective. You may purchase term insurance as an Indian citizen but may relocate abroad for work or other reasons during the policy term. In such cases, policyholders must notify their insurer of their intention to relocate to a foreign country.
Personal accidental insurance may be ineffective if the death occurs in a war zone. War, invasion, and hostilities are common exclusions in term plans.
Many parts of the world are still in turmoil, including the current ideological crisis at Iran or the clash between Pakistan and Afghanistan or the tug-of-war between China and Taiwan and the most recent terrorist attack in Africa. Many Indians are unwittingly caught up in such crises.
The death of a loved one, who is often the breadwinner, adds financial strain to already bereaved families. A life insurance policy can help these families by providing significant financial support to the beneficiaries.
