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Questions to Ask Before Availing Term Insurance Research Team | Posted On Tuesday, July 09,2019, 05:40 PM

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Questions to Ask Before Availing Term Insurance



Term insurance plans are generally availed to cover financial liabilities and offer a lump sum to dependents, in case of untimely demise of the breadwinner. People often disregard policy clauses like smoking/drinking, term insurance cover for death in an accident or if term cover is valid if they shift to a foreign country. Listed below are some of the doubts and queries answered, to help customers avail term life insurance, easily.

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Questions to Ask Before Availing Term Insurance

Would the premium of a term insurance bought today, change in the future?

The premium of the term insurance policy is decided at the inception of the policy and remains constant across tenure. The policy premium changes when some change is brought about by the policyholder like availing an add-on rider, if he has developed any habits like smoking/ drinking, in case of any disability or life-threatening disease and so on. On declaring any such changes, the insurer may raise premiums and you end up paying a higher premium on term life insurance plan.

What would happen if a person starts smoking a few years after purchasing the policy?

 If a policyholder develops the smoking or drinking habit or any other habit which is life-threatening, then he/she must declare it to the insurer, immediately. Otherwise, the insurer may choose to raise premium rates due to improper disclosure, or may cancel the policy, altogether.

See Also: How Much Term Insurance Should I Buy? 

Would the policy cost more if the person has a history of smoking?

This clause varies across insurers. You must check the policy terms before availing the plan. Some insurers accept people who have not smoked for a certain number of years just as normal customers, whereas some insurers ask the client to disclose his/her past smoking/drinking habits and time of cessation of smoking.

Is term insurance claim settled successfully in case of accidental death?

The basic term insurance plan pays the nominee in case of natural death or death due to illness. However, there are various riders that enhance the base policy like accidental death cover, critical illness rider and disability rider. If you avail riders the nominee will be paid the sum assured for death in an accident, along with the additional rider benefit.  

See Also: Tips before Buying Online Term Insurance Plan

Is life insurance considered valid, if death occurs outside India?

Term insurance plans are valid in case of death in a foreign country. However, the policyholder must reveal this to the insured. In case you immigrate to a foreign country, then update mobile number and address. But, if the policyholder moves to a country like Syria, Somalia or Burma, then the life insurer may deny term life insurance.

What if I don’t die within the term?

There are no survival benefits in term life insurance. In case of death within the policy term, the nominee gets the death benefit. Term life plans offer extensive coverage even up to 70 years.

See Also: Term Insurance Plans with Return of Premium

How claim settlement works if the person has more than one policy?

A policyholder may avail more than one term life insurance plan. In case of death of the policyholder, the nominee may submit copies of the original death certificate to file claims and settle it with the insurance company. However, the policyholder must communicate these details to the insurer and while filling the proposal form he must provide all the necessary information to prevent rejection of claim.

How good are insurance companies when investigating death claims?

Generally, if a death claim is raised within two years of the purchase of term life insurance plans, then the insurer conducts a thorough investigation and then settles the claim. As the sum assured is high, a thorough investigation is a must. However, in case the claim is raised 15 or 20 years after the purchase of the life insurance policy, then settling death claims is easy as less investigation is required.

See Also: Why a Term Life Insurance Policy is a must?

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