Answer 7 Questions Before Buying Term Insurance
When you buy an insurance plan, it provides financial security to your family. There are several aspects of an insurance policy that you should know before buying. The tenure of these policies can range between 10 to 50 years. A life insurance term plan offers high covers at relatively low premiums. But there are many doubts we face while choosing the right policy. If you are not familiar with insurance policies, several misconceptions can cloud your judgment.
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It is recommended to clear all such doubts before you invest in the best life insurance term plan. The questions answered below can help you avoid some confusion and suspicions.
- Will the premium change?
The premium will not change unless it is specially mentioned in given documents. Moreover, the premium of a life insurance term plan plan has to remain the same throughout the policy term. It means that the policyholder life-threatening habits like smoking or drinking. On confirmation of any, the company can apply a higher premium rate on the policy.
- Would the policy cost more for a person with a smoking history?
This varies from policy to policy. Some insurance providers require a policy buyer to mention their habits. There may be some insurers who give exception if the holder has not smoked in at least three years as nonsmoker. Be sure to check the rules of the company. Please use term plan comparison to get a better understanding.
- What can happen if the person develops smoking habit after some years?
Habits like smoking or drinking can reduce life expectancy. If policyholders get into these habits, they must reveal this to the term life insurance policy company as they become part of a different risk section now. Else the company can impose an increase in the current premium or even cancel it. So, the insured must send information about such developments to the company. Otherwise, your claim can get declined as a breach of the clause. Use the term life insurance calculator to calculate the additional premium needed.
- Can we successfully claim insurance in the case of accidental death?
The life insurance term plan pays the nominee in case of accidental death also. Irrespective of the reasons, the sum assured, meaning, the cover amount will be paid to the nominee. Moreover, various riders like accident death benefit, disability rider, and illness rider could boost the term plan.
- Will the life insurance be valid when death happens in a foreign land?
Term plan is valid even when the death occurs in a foreign land. The holder should have informed this factor to the insurance company. They should inform that they are now living outside India. But this facility is deferred if the holder traveling or shifting to an unsafe country.
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- What happens if the policyholder doesn’t die?
People generally find it upsetting that there is no maturity claim in the case of a life insurance term plan. If this concerns you, you should understand that changes in your policy can go through it near the term-end.
- When the term is about to end, you will get the choice to retain your policy, resulting in a rise in the premium.
- You always need your policy covering your liabilities such as house loans, or children’s education. Policyholders who do not have any other obligations might not wish to renew their policy.
- Mostly, a term life insurance policy provides you with a conversion opportunity. This helps you to convert your old policy to get the latest permanent policy.
- You can use a term life insurance calculator to check the premium needed.
- When a person has multiple policies, how does the claim settlement work?
In multiple policy cases, it is essential to mention in the life insurance term plan proposal form that you have a policy already from some other company. The form must be handed after filling in such mandatory information. You must be careful at the time of form filling by providing all the necessary data regarding the previous policies to avoid a problem during the claim settlement.
Can An NRI Purchase Insurance?
NRIs can purchase the life insurance term plan, but they should be Indian residents as the insurance company needs some documents such as address and age proof. They can directly buy it online after using a term life insurance calculator or even purchase using written communication when they are residing in a foreign land.
Moreover, they can purchase the term life insurance policy and also provide the documents like the last three years’ income tax returns and medical examination reports during their next Indian visit.