Questions that we should ask Before Purchasing Term Insurance Policy
With taking a term insurance plan, confusions also come our way. There may be several people who are taking a term plan for the first time, however, are not sure whether or not their family would get a full coverage if something unfortunate happens to them. There are people who already have a term plan but do not know if the other one will help them cover the critical illnesses as well. Some are confused if they can have more than one term plan. Having such confusions before investing your hard-earned money in term insurance is very natural. It is also of major concern because your family has to deal with the situation of claiming the money when you are not there to help them physically.
Therefore, you can go through these common questions that you can ask before you buy term insurance.
- If I buy the term insurance today, will the premium change in the future?
A: Before you sign the papers, you need to be sure about the clause where it is mentioned that the premium amount is going to remain the same through the term insurance policy.
- What if I start smoking heavily after some years?
A: If you develop a habit of smoking or drinking after some years which may affect your life expectancy, you must reveal it to the insurance provider. Since the insurance provider is a part of many risk pools now, you must keep updated. Failing to do so may lead to an increase in the premium amount.
- Will a term insurance policy cost me more if I have a smoking history?
A: This completely depends upon the policy. All policies are different, and some of them demand the policyholder to let the insurer known about all the smoking and drinking habits. Therefore, you must check all the rules associated with the policy before purchasing one.
- Will term insurance be valid if the unfortunate incident takes place outside India?
A: The cover will be valid even if the insured loses life outside India. However, in case you are shifting to a different country, you must update the insurer about the information just like a change of phone number address, or even nominee.
- What if I have more than one policy?
A: Having more than one policy is not a problem. However, while buying one, you must mention the same. You also need to provide information such as the company from which you have bought it. In a situation of death, all the companies must be informed about it. The beneficiary has to provide the Death Certificate to claim the cover.
- Do insurance companies investigate death?
A: It totally depends when the cover is being claimed. If the nominee claims the cover right after 2 years from the date of buying the term, the insurance company may investigate the death of the insured. On the other hand, if it is done after 12 to 15 years, they may not investigate but will only ask for a proof like Death Certificate.
- What kinds of deaths are not covered under term insurance?
A: Deaths caused due to natural disasters or terrorist attacks are not covered under most insurance policies. However, before finalizing a plan and buying it, you must go through these kinds of clauses once.
Also, please remember to be 100% honest on the application. Matt Schmidt of Diabetes Life Solutions mentions ” if an insurance company finds out you provided false information on the application, the death claim may be declined. In the event a person dies within 2 years, companies will dig a little deeper into a person’s health history. Often times they may discover information differently in your records, compared to answers on your application. This leads to claims getting denied.”
- Can I buy term insurance even when I am not in India?
A: You can certainly buy term insurance even when you are out of India. However, you must be a resident of the country and may need to provide your address as well as age proof. You can purchase the term plan online. You can submit documents, medical reports, and ITR of the last 3 years on your next visit to India.
To clear your confusion further about the term insurance, you can visit the IIFL Insurance website and check out all the information that is mentioned there. You can also compare the term plans and choose the one that meets your needs the best.