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Top Questions to Ask When Buying Term Insurance Plans

Updated On Jul 13, 2021

A term insurance plan is bought to provide your loved ones with an umbrella of financial protection if anything unfortunate happens to you. That is why it is crucial to ensure that the umbrella is strong enough to help them face any financial crisis while also providing assistance to fulfil their future dreams and aspirations. Read on to find out about some of such questions which should be considered while purchasing a term insurance policy.

Top Questions to Ask When Buying Term Insurance Plans

Here is the list of top questions that must be asked when you buy a term insurance insurance policy.

1. What Happens When the Life Assured Starts Smoking After Purchasing the Plan?

If the life assured starts smoking or drinking after purchasing the term insurance policy, he/she is obligated to inform the insurance provider as the health risk involved has increased. Suppose the life assured tries to hide this information. In this case, the insurer can increase the premium rates, terminate the policy or even reject the nominee’s claim request if the life assured dies due to the implications of such habits. 

2. Can NRIs Purchase a Term Insurance Policy?

The NRIs can purchase a term insurance policy by showing the address documents to prove that you are a resident of India. Moreover, the policy can be purchased online through websites and portals. Furthermore, such policyholders are provided with the option to submit their medical reports and income tax return documents whenever they visit India. 

3. Will Death Benefits Be Provided If the Life Assured Dies Outside India?

The term insurance policy will still be valid if the life assured migrates outside India like the US or UK and dies before completing the policy tenure. He/she has to inform the insurance provider about the migration and change contact details like phone number, address. However, it must be noted that the death in countries with the unsafe environment like Burma, Pakistan, Iraq etc., might not be covered by the insurance company. 

4. What If Life Assured Does Not Die Within Policy Tenure?

It is essential to know that the term insurance policies do not offer maturity benefits after the completion of policy tenure. However, the insurance providers can offer the option to retain your policy before the duration is completed at higher premium rates. Moreover, since many people purchase a term insurance policy to ensure help in children’s education, marriage, loans and debts repayments, you can choose not to renew your term insurance policy if all these obligations are fulfilled. 

5. What Death-Related Cases Are Not Included Under Term Insurance?

Policy exclusions refer to the death-related instances which are not covered under the term insurance plans. These include some cases like death due to childbirth, adventurous sports like bungee jumping, skiing, hiking, scuba diving, paragliding etc., suicide (within the initial 12 months of policy inception), alcohol intoxication or drug overdose, war, terrorist attack etc. All these cases must be read carefully before choosing a plan.

Take Away

Purchasing a term insurance policy is a significant financial decision which must be done right to avoid any financial burden on your family. Hence, you must estimate your personal needs and  family’s future goals to decide the adequate sum assured and policy tenure at affordable premium rates. You can even consult a financial advisor to know the answers to questions similar to those mentioned above.

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