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Why is a Medical Test Important While Buying Term Insurance? Research Team | Posted On Monday, July 22,2019, 12:08 PM

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Why is a Medical Test Important While Buying Term Insurance?



Shashank and Ganesh are close friends. They are also of the same age of 35 years. Both have decided to avail term life insurance. Shashank avails term life insurance for one year by paying a yearly premium of Rs 3,000.

The sum assured for Shanshank’s term policy is Rs 50 Lakh. Ganesh also approaches the same insurance company to buy the term insurance plan. The insurance company is offering Ganesh a lower sum assured for the same premium. Why is this so? This is because Shashank has undergone a medical test prior to availing term insurance, while Ganesh did not.

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Why is a Medical Test Important While Buying Term Insurance?

Discount for Medicals:

Yes, insurers offer a discount on term plans to those who take medical tests before availing term insurance. Opt for a medical test to enjoy hassle-free claim settlement. Section 45 of the Insurance Laws (Amendment) Ordinance says that no insurance claims can be denied after 3 years for any reason. It means the insurer has 3 years to check for non-disclosure of medical conditions. If you take a medical test, the possibilities of the claim getting rejected are low.

Lower Premium

The premium for a term insurance plan is computed based on age, lifestyle habits, profession, the sum assured, pre-existing diseases and so on. It has to be paid at regular intervals (annually, semi-annually, quarterly or monthly).

Usually, the premium for people who have undergone medical tests is lower. When you take the prescribed medical tests, the risk for your insurer is low. Therefore, they may offer higher sum assured at a lower premium.

Undergo Medical Tests for Free

Many well-known insurance companies are ready to pay for your medical tests, while availing term insurance. They will give you the list of hospitals with tie-ups (Network Hospitals). All you have to do is select the hospital, book an appointment and get the requisite tests done. Sometimes, insurers reimburse for costs of medical tests.

In this case, the insurer reimburses the medical expenses if you can produce the medical reports and the medical bills. It is worth mentioning that the medical tests done under the pre-insurance band are standard medical tests. The results of the medical tests will help insurers in deciding the insurability of an individual.

Higher Risk Coverage

Risk coverage is an integral part of a term insurance policy and covers the risk of the insured for a given period. Normally, term policies offer risk coverage for up to 65 years. If you would like to get higher risk coverage, undergo medical tests. When you choose a policy with no tests, you might not get sufficient cover for risk. When the actual risk is not covered, the sum assured is lower. So, medical tests are a must.

Get a Customized Term Insurance Policy:

Insurers offer you a customized term insurance policy, if you undergo medical tests. Opt for term insurance with critical illness rider. Such policies normally cover critical diseases like lung cancer, heart diseases, cancer, paralysis and so on. Also enjoy tax benefits under Term Life Plans up to Rs 1.5 Lakhs a year under Section 80C.

What do Medical Tests Cover?

They differ across cases. The common medical tests are a blood test, a BMI test and a urine test. The blood tests normally contain test profiles like fasting plasma glucose, differential count and complete blood count. They may also cover HIV test and a cholesterol test. The insurance company requires you to take additional tests if required.

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