New Delhi. The explosion near the Red Fort in the country’s capital has raised many doubts and questions regarding the safety of the common man as well as insurance. Are terrorist attacks included in a life insurance policy that claims to protect you and your family, both during and after life? Can your normal life insurance policy alone compensate for the loss caused by terrorist incidents or will you have to take special insurance or add-on for this? Let us try to answer these questions with facts and rules.
Although terrorist incidents happen occasionally, the damage caused is very high. There can be a big threat not only to goods but also to human life. Actually, calamities are covered in the insurance of other vehicles including car and their loss due to terrorist incidents is easily compensated. The real problem is regarding human life. Therefore, it is important to understand how life insurance policies sold in India cover terrorist incidents.
What to check in the policy document
First of all, you need to know that terrorist activities are not automatically included in all insurance policies. In many policies, a separate selection has to be made to cover terrorist activities or terrorist policies have to be purchased separately. This means that currently terrorist incidents are not covered in your life insurance policy. In most policies you get a chance to choose this, but in many policies you have to buy a separate addon or no policy at all.
There was a change in 2002
After the September 11 terrorist attacks in America in 2001, insurance companies around the world withdrew from it. After this, in April 2002, India established the Indian Market Terrorism Risk Insurance Pool (IMTRIP), which is managed by GIC Re. Through this pool, property insurance policies provide protection against terrorist risks. Under this pool, all the insurance companies of the country cooperate collectively to provide coverage against terrorist incidents and risks.
Premium is deposited in the pool
Premium worth crores of rupees is deposited in this pool every year. In the financial year 2023-24, this pool received a premium of Rs 1,654.63 crore, which was Rs 1,809 crore in the previous year. However, the claim for loss due to terrorist incidents was settled only for Rs 3.12 crore, because there was no major loss in the country at that time. According to the IRDA report, more premium was deposited in this pool while very less claims were made due to terrorist incidents.
What is the maximum coverage?
Under this pool, insurance companies can provide a maximum coverage of Rs 2,000 crore. This coverage is given for loss caused at any one location in a terrorist incident. However, if someone wants an insurance claim or coverage of more than Rs 2,000 crore, he will have to buy a standalone insurance policy. Under such addon, the losses incurred in terrorist incidents can be directly compensated. This includes coverage like explosion, fire or damage to the building.
What are the rules for insurance policy
Most terrorist incidents are covered in life insurance policies. If it has not been excluded under any rule in your document. This means that if someone dies in a terrorist incident, the insurance money will be paid to his nominee. However, sometimes life insurance policies do not include coverage in situations like war. Additionally, coverage is also not provided if an insured takes part in a riot or attack.
