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Term Insurance and National War Emergency: An Indian Perspective

Submitted by admin on May 8th, 2025

Today’s turbulent geopolitical conditions have made financial preparedness more critical than ever before. The strategic geographic position and continuing border tensions between India and neighbouring states lead experts to consider that national wartime emergencies could happen. The financial backbone of families whose members belong to the working class or serve the defence forces rests on term insurance in situations of emergency.

Understanding Term Insurance

Term insurance exists as a basic life insurance product which delivers death coverage to the policy’s designated beneficiary throughout its scheduled duration. Term insurance provides families financial protection at affordable costs following an unexpected death of an insured person. Unlike standard life insurance products this insurance design lacks both maturity benefits and accumulation features because its main function remains to protect policyholders when they pass away during the policy period. to safeguard loved ones.

A National War Emergency establishes a declared state of conflict against an external enemy that threatens the nation.

A national war emergency describes how central government authorities activate Article 352 constitutional powers whenever war or armed conflict threatens the country. Public funds withdraw into national defense causes economic slowdown while civilian safety becomes endangered. When the primary family earner dies families face catastrophic financial difficulties.

Term Insurance During War: Does it Cover War-related Deaths?

The next sections will present a complex picture. War-related deaths together with invasions or nuclear incidents are excluded from standard term insurance coverage in India. The terms and conditions of a policy document explicitly detail all particulars which a policy will not cover. War-related death benefits typically exclude coverage so policyholders may not get any compensation from their claims.

Armed forces personnel can obtain coverage for war risks through specialty add-ons or riders from certain insurance companies.

The Armed Forces Group Insurance Scheme (AFGIS) and other defence-specific covers are tailored for those serving in high-risk zones. Civilians, however, rarely opt for or have access to such coverage unless explicitly stated.

The Role of Term Insurance in War-affected Economies

Even if direct war-related deaths are excluded, term insurance still holds massive importance during a national emergency:

• Collateral Impact Coverage: Deaths due to indirect effects of war—like riots, civil unrest, heart attacks triggered by stress, or even accidents—may still be covered under the policy.
• Financial Stability for Families: In times when businesses shut down, jobs are lost, and inflation rises, the lump sum received from a term policy can help a family survive without falling into debt.
• Support for Migrant Workers & Civilians: War displaces families. Those who had term insurance are better positioned to navigate relocation or loss of livelihood.

Government Measures

While term insurance providers are private or semi-government institutions, government-backed schemes like PMJJBY provide minimal but crucial support to low-income groups. In the event of a large-scale emergency, the government may also issue special directives to insurance companies regarding claim settlements.

Conclusion

In the Indian context, term insurance serves as a financial backbone for families, especially when the country is facing war-like conditions. While exclusions related to war exist, term plans still offer protection against indirect consequences and should not be overlooked. Policymakers and insurance providers must work together to bridge the gap in war-risk coverage, ensuring no family is left vulnerable during a national emergency.