Term policies are considered to be the pure life insurance product. They give your family
financial security during a difficult period in their lives after your untimely demise. Over
the period of time, policies have evolved to include additional benefits in the event of a
critical disease diagnosis. Most people today recognize the value of having a term
policy. Given that India still has one of the lowest life insurance penetration rates on the
planet (2.74%), it is reasonable to assume that many Indians are hesitant to get a term
insurance policy. Therefore, deciding on the appropriate term insurance plan for your
needs can be challenging. Here are some questions to ask yourself before acquiring a
policy either online term plan or offline:
1. Will the term insurance premium amount change after purchase?
It is usual practice to schedule premium payments well in advance, therefore it is
unsurprising that this is a frequently asked question. Fortunately, the premium amount
of a conventional term life insurance policy should remain constant throughout its
duration unless expressly stated otherwise in a provision at the time of purchase. Of
course, if the policyholder gets a disability/lifestyle condition later in life, most insurance
firms will still be able to increase their premium.
2. Can my bad behaviour affect the cost of a term insurance policy?
While this is mostly determined by the company’s policies, activities such as smoking or
drinking that have a negative impact on a person’s life expectancy do affect the cost of a
term life insurance policy and the amount of each premium payment. Some
businesses require consumers to declare any life-threatening habits at the time of
purchase, while others will accept policyholders who have avoided such behaviours for
a few years before the purchase.
3. How can my lifestyle ailment affect a term plan?
Customers who are prone to developing addictions should think twice before acquiring a
term life insurance policy because habits such as smoking or drinking cause insurers to
place the policyholder’s case into a different risk pool. Since the policyholder’s life is
now in danger as a result of their lifestyle problem, life insurance firms reserve the right
to charge higher premiums or, in severe situations, cancel the coverage entirely. To
avoid the denial of a death benefit claim by the dependent in the event of an
unexpected death, policyholders should disclose any information about such
undesirable habits to the company well in advance.
4. Can NRIs buy term insurance?
Yes, as long as they have documents proving that they are not a liability, such as proof
of age or address in India. When you buy online term plans in India, you can send these
documents to the insurer remotely, and the appropriate medical reports can be
completed when the individual returns to the country.
5. Can insurers refuse to pay claims for certain deaths?
Yes. If the policyholder dies as a result of terrorist acts, natural disasters such as
earthquakes or tsunamis, and so on, the insurer is not obligated to pay the nominee the
sum assured. Such claims are occasionally settled thanks to the involvement of the
Insurance Regulatory and Development Authority. It is generally advisable to read such
terms and conditions before making a purchase of an
6. What happens if a person carries multiple policies?
Transparency is vital in the insurance world, which is why you should always inform
them that you have numerous policies before signing up for a new one, especially if it is
from a different provider. It is critical that the person filing the claim submits the death
certificate to the firm with the longest-running policy in the deceased individual’s name.
The companies should also be notified, along with an acknowledgement from the first
company that the settler approached.
7. Can nominees receive death benefits if they die outside of India?
Yes, assuming that the policyholder has told his insurer that he has relocated to an
outside Indian location, as s/he should with any change in personal information,
including phone numbers and addresses. However, keep in mind that the insurer may
withhold the death benefit if the policyholder dies in a nation considered high-risk, such
as one known for terrorism and violence against its citizens. In countries such as the
United Kingdom and France, term insurance policies are typically valid.
8. How thoroughly do insurers investigate the circumstances of the death?
This depends on the type of claim. An early claim, when the policyholder dies within two
years of acquiring term insurance, necessitates a comprehensive investigation because
it is costly for the insurer. However, if it is a regular claim in which the policyholder has
paid his premiums for more than a decade, the business will relent and settle the claim
without conducting a thorough inquiry.
9. Can candidates collect the death benefit in the event of accidental death?
Usually yes. Regardless of how the policyholder dies, term insurers must pay the
assured sum to his or her dependents. However, you can supplement your existing term
life insurance policy by purchasing additional riders that cover accidental death,
permanent disability, or critical illness. This ensures that the nominee receives
additional funds beyond the sum assured upon the policyholder’s death.
10. What happens if the policyholder lives longer than the maturity date?
If the policyholder lives longer than the term insurance policy’s maturity date, insurers
are not required to pay any sum assured. This generally irritates consumers, thus it is
critical to ask such questions before purchasing a plan. However, many banks allow you
to update your policy by using a conversion privilege, which allows you to exchange
your old policy for a new and permanent one. It is strongly encouraged to choose a
policy that allows for premium increases as well as the ability to pay for new expenses
such as your children’s education or mortgage.
At last,
By now you must have understood that getting insurance coverage for you will help in
securing the future of your loved ones. In today’s world, one of the most common ways
for people to protect their dependents and families is through a term life insurance
policy. However, choosing the wrong decision from among the many possibilities
available can have serious consequences for your long-term financial goals. In the
aforementioned points, some of the most often-asked issues and concerns about term
insurance coverage have been addressed.
