Common Questions About Term Insurance Answered
Published On Jun 23, 2021, Updated On Jun 25, 2021
Table of Contents
- 10 Common Questions About Term Insurance Plan Answered
- 1. Will the Premium Change in The Years to Come?
- 2. What Will Happen If the Insured Starts Smoking Few Years After Securing Himself?
- 3. Will the Policy Cost More If I Have a Smoking History?
- 4. What about the Claim in Case of Accidental Death?
- 5. Is Term Insurance Cover Valid Outside India?
- 6. What If I Reach the Maturity of The Plan?
- 7. What Is the Claim Settlement Process for A Policyholder Having More Than Two Policies?
- 8. How Do Insurance Companies Investigate Death?
- 9. Can A NRI Purchase a Term Plan?
- 10. What are the Death Benefits that Term Insurance does not cover?
Term insurance plan is a life cover designed to protect your family's finances from an untimely death or unpredictable incidents. Claims in a term insurance can be availed when a life insured passes away and the beneficiary claims the sum assured. After the internal formalities have been completed, the insurer pays the sum assured to the nominee as prescribed in the policy.
Below are some questions that might pop up in your head while purchasing a term insurance plan. All the questions are answered below.
10 Common Questions About Term Insurance Plan Answered
Here's a list of the few most commonly question that can come to mind while purchasing a term insurance plan:
1. Will the Premium Change in The Years to Come?
The premium of a term plan remains the same through the cover period unless there is a clause mentioned in the document. If the policyholder develops life-threatening habits like smoking, drinking or any disability the company may alter the premium.
2. What Will Happen If the Insured Starts Smoking Few Years After Securing Himself?
If the person has developed habits like smoking or drinking, this will reduce life expectancy. Therefore, it is necessary to reveal this habit to your insurance provider at the earliest to avoid future hassles such as rejection of claim settlement.
3. Will the Policy Cost More If I Have a Smoking History?
Usually, there is a lower premium rate for non-smokers, but it totally varies from policy to policy, for instance, an insurance company may require an individual to disclose if he/she was a smoker or drinker, even if it was a past habit. Before applying, read the insurance proposal rules thoroughly.
4. What about the Claim in Case of Accidental Death?
In case of accidental death of the insured, the sum assured will be paid successfully to the nominee. Additionally, there are various riders such as accidental death benefit, critical illness rider, and permanent disability rider to offer you better protection in your term plan.
5. Is Term Insurance Cover Valid Outside India?
In case of untimely death outside India, the term plan is very much valid. Also, if the policyholder has migrated to another country, he needs to inform the company to update information like phone number, address or nominee. But, if the insured is moving to a country that is considered unsafe or a war zone, then the company may not provide this facility. However, your life cover from a term plan is valid in countries like the US or UK.
6. What If I Reach the Maturity of The Plan?
One needs to understand that as the policy reaches maturity date you can avail various options like retaining your policy or if you have lesser responsibilities you can opt for less coverage or upgrade your old term policy for a new cover.
7. What Is the Claim Settlement Process for A Policyholder Having More Than Two Policies?
In this scenario, one should provide information declaring possession of a policy from another company and then submit the form. The process during claimant is to submit the death certificate to the insurance company with whom the policyholder is associated for the longest time. Followed by informing other companies of the procedure due and an acknowledgment from the first company.
8. How Do Insurance Companies Investigate Death?
If the claim happens within the first two years of purchasing a cover then the company does a thorough investigation. It is easier to settle a normal claim where the premiums are paid regularly and the policy term is for a long period (more than 10 years).
9. Can A NRI Purchase a Term Plan?
Yes, NRI’S can opt for a term plan, if they are Indian residents. The documents required address and age proof which shows where you belong in India. You can directly purchase the policy online and submit the documents, along with previous 3 ITR forms and medical test reports during your next visit to India.
10. What are the Death Benefits that Term Insurance does not cover?
Many buyers are ignorant about the fact that "Death due to Terrorist Attack" are not covered under the term insurance. Such term insurance claims may be settled down on humanitarian grounds later on when the nominee contacts the insurance company but the clause is excluded in most of the companies. Deaths due to natural calamities too are not covered under the term insurance plans.
The answers to these questions will help you all in deciding a term insurance plan.the above stated queries have been addressed and would no longer be a deterrence in choosing and later on buying a term policy.