Is A Term Insurance Policy Portable?
Published On Nov 02, 2021 2:00 PM By InsuranceDekho
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Term plan portability is a concept in which the insurer (including family cover) is guaranteed the right to transfer the insured’s debt in terms of existing conditions to another insurance provider, provided the previous policy is retained without leave.
Life insurance portability is a condition of protecting the interests of customers and can promote a fair and competitive market. If used, insurers will redouble their efforts to keep existing customers with a good quality of service and payment of requests. It can result in the introduction of simple and competitive products.
Portability, however, is only possible for products with a time limit between premium receipt and benefit payments. Due to the short-term agreement, the coverage applies well to general insurance, temporary health insurance, and group life insurance (protection products), where the policy can be added to other insurance annually. Individual members under a group insurance policy may carry the coverage of each policy as well.
Benefits Of Term Plan Portability As Opposed To Conversions
Converting your term insurance plan can have detrimental effects and even an increase in debt, which is not the case when it comes to term plans portability. However, you will receive only limited get policy coverage (if the period was 30 years and you have been working for the company for 15 years, this coverage will only be valid for another 15 years).
The premiums for applying for your life insurance policy will be lower than if you decide to change it. However, they will increase as you grow older. Additionally, there may be a policy age limit, and once you exceed that age limit, you will not be able to renew it.
If you decide to turn your policy into a life insurance policy, premiums will be very expensive. However, you will continue to receive payment until you die, as long as you continue to pay the premiums. If you are not sure which option to choose, talk to a reputable insurance agent. Together, you can evaluate your individual needs and your existing group insurance policy to determine if converting or modifying your policy can help you.
Benefits Of Purchasing A Portable Term Insurance Policy
Portability safeguards the interests of the customer and IRDAI has considered introducing this option to improve customer choice. It promotes transparency as customers are allowed to switch easily from one life insurance provider to another without much hassle. Here are some of the possible benefits of buying a portable term insurance policy:
Financial Security For Your Dependents
The insurance money can ensure that your family’s monthly expenses are met after your demise, and important goals such as your child’s education and marriage are taken care of in your absence.
Protection For Your Assets
Mortgages that you take when in good health can be a huge liability for your family in the unfortunate event of your death. An assured death benefit can make sure that your family can pay off your debts
Coverage For Medical Contingencies
In a post-pandemic world, every family should be ready for medical emergencies. Some term insurance plans not only protect your family after death but also provide coverage for terminal illnesses and other threatening medical situations. This feature pays for the diagnosis of certain serious illnesses such as cancer or heart disease.
The main benefit of a portable portfolio is to extend the waiting times from the previous policy. Life insurance products do not usually consider existing diseases. The only waiting period is in the case of suicide, which applies to the first year of the policy.
Purchasing a portable term insurance plan in India is a great way to diversify your financial portfolio and secure the future of your family. With the right information on the policies and their portability, you can ensure your loved ones are cared for even after your time.
Also read: How Term Insurance Policy Can Help You Enhance Your Tax Savings?
How Is Term Insurance More Beneficial Than Other Types Of Life Insurance Policy
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.