Buying a term policy should be the first thing on your list while creating your financial plan. It protects your family from the monetary risks associated with the uncertainty of life. The sum assured that your loved ones will receive in case of an untoward event will take care of all the household expenses, children’s education, financial goals, liabilities, and medical bills. If you are eager to know what is term insurance and why it is so popular, read further.
A term plan is a simple type of life insurance policy that only provides you with life coverage. Here, you need to pay a timely premium to be insured. The high sum assured and affordable premium are the two plus points that make it one of the most sought-after insurance products available in the market today. While buying a term plan, consider aspects like the sum assured, premium, and tenure of the policy. A term plan calculator can help you compare the features of various policies, making it easier for you to select the one that meets your needs.
The premium of a term policy depends on your life risks and health. Factors like your pre-existing diseases, congenital deformities, risk of diseases due to genetics, lifestyle habits like smoking and consumption of alcohol, and occupation can influence this cost.
When can an insurer revise the term insurance premium?
While buying an online term policy, you need to pay the basic premium before filling the application form and going for a health examination. In the form, you will need to mention the personal risks, like lifestyle-related habits. The insurer will scan your form carefully and will review your personal risks for the policy and any riders that you had chosen. Besides this, the medical examination will point out the health-related risks. All such information can play a crucial role in determining the life cover amount and the premium. Here, the insurance company can revise the term insurance premium. The insurer can increase the premium if you have high risks due to any pre-existing medical conditions or a family history of a particular ailment. In some cases, the insurer reduces the life coverage amount instead of increasing the premium.
Things to consider when your insurer revises the premium
If you want to continue with the term plan, you will have to pay the remaining premium to the insurer to stay insured. Even if you go to a new insurer company, chances are high that they will determine the premium based on your life-related risks. So, instead of wasting more time, it is advisable to pay the difference and get the policy.
Is it necessary to revise the information in the policy proposal form?
While filling the application form, ensure that you enter all the correct details. It is because the insurer can reject the claim if they find out that you have given false information. For instance, if you are a smoker and avoid mentioning it in the form to save on the premium, the insurer can deny your application if they find out the truth. This can hamper your trust score. Therefore, it can become difficult for you to get insurance even from other insurers. Additionally, if an unfortunate event occurs in the future, the insurer will reject the nominee’s claim if they get to know that smoking is the cause of your absence.
Secure your life as early as possible with term plans, as you never know what lies ahead. So, invest in an online term policy, as you can get it at a relatively cheaper premium compared to purchasing a plan via traditional means. You can seek the assistance of a term plan calculator to get an estimate of the premium you will have to shell out for your desired sum assured. Do not hide any information just to save some money and put your family’s financial future in jeopardy.