India-Pakistan conflict: Your insurance policy may not cover 'act of war'

Business Standard

09-05-2025

Does your life or term insurance policy cover claims arising from an 'act of war'? With tensions between India and Pakistan on the rise, now may be a good time to review your insurance documents and reassess whether your financial protections are still adequate.
According to Narendra Bharindwal, president of the Insurance Brokers Association of India (IBAI), most life and term insurance policies do not.
'Standard life or term insurance policies typically exclude deaths caused by war or war-like operations,' said Bharindwal. 'There's usually a 'war exclusion' clause built in that applies to civilians as well as active military personnel.'
The war exclusion clause
— War, whether declared or undeclared
— Invasion or act of foreign enemy
— Hostilities, civil war or rebellion
— Insurrection or any similar events
This means that even if the policy is active and all premiums are paid, a death resulting from these causes may not be covered.
'If a person dies in a bomb explosion in an active conflict zone abroad, and it's traced back to a war-related event, the insurer can reject the claim,' said Bharindwal. 'But if the death was from an unrelated cause, like an illness or accident, the claim might still go through.'
Sandeep Katiyar, co-founder and CFO of Finhaat, explained further. 'Insurers typically have war exclusion clauses baked into the terms,' he said.
According to him, claims may be rejected if death results from:
— Participation in war or war-like operations
— Terrorist activities
— Acts of foreign enemies or invasions
— Being in a known conflict zone, even if not directly involved
However, he added, 'If an Indian expat living in the Middle East dies of a heart attack, and there's no link to the ongoing conflict, the claim can still be honoured — provided there are no geographical exclusions in the policy.'
Are there exceptions?
'Some group term insurance plans for defence personnel or corporate insurance for employees posted overseas may include specific cover for such risks,' said Bharindwal. 'But these aren't standard and usually need custom underwriting.'
Government bodies like LIC or the Army Wing offer war-risk cover to military personnel through schemes like Armed Forces Group Insurance. Civilian policies from private insurers, on the other hand, usually stay away from war-related coverage.
Katiyar said some corporate policies — especially in high-risk sectors like oil and gas, media, or diplomacy — may be customised to include group accident or life cover with such provisions.
High-risk international travel policies from general insurers such as Tata AIG or ICICI Lombard may include terrorism cover, but under health or personal accident categories — not life insurance.
What policyholders should check
Katiyar listed a few things individuals should watch for in their policy documents:
— Read all exclusions carefully, especially those mentioning war, terrorism, or high-risk jobs
— Check for optional add-ons like accidental death or terrorism cover
— Review territorial limits — some policies exclude coverage outside India
— For NRIs, confirm whether being in a high-risk area affects claim eligibility
'If you see terms like 'acts of war', 'civil commotion' or 'terrorism' in the exclusion section, it's a red flag,' he said. 'Clarify with your insurer.'
He added that policyholders living or working in high-risk zones should consider:
— Comprehensive international life insurance that includes conflict zones
— AD&D (Accidental Death and Dismemberment) riders with terrorism cover
— Group insurance negotiated by employers with explicit war-risk inclusions
— Global insurers who state inclusion of conflict zones, subject to certain conditions
'Most importantly, always declare your location and job profile truthfully. If you leave that out, the insurer might reject the claim later — even if the death wasn't war-related,' said Katiyar.