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 would receive in case of an untoward event will cover all the household expenses, children’s education, financial goals, liabilities, and medical bills. If you want to know what term insurance is 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 today. While buying a term plan, consider aspects like the sum assured, premium, and policy tenure. A term plan calculator can help you compare the features of various policies, making it easier to select the one that meets your needs.
The premium of a term policy depends on your life risks and health. Factors like pre-existing diseases, congenital deformities, risk of infections due to genetics, lifestyle habits like smoking and alcohol consumption, and occupation can influence this cost.
When can an insurer revise the term insurance premium?
While buying an online term policy, you must pay the basic premium before filling out the application form and going for a health examination. In the form, you must mention personal risks, like lifestyle-related habits. The insurer will scan your document carefully and review your chances for the policy and any riders you have chosen. Besides this, the medical examination will point out health-related risks. All such information can be crucial in determining the life cover amount and the premium. Here, the insurance company can revise the term insurance premium. The insurer can increase the bonus if you have high risks due to pre-existing medical conditions or a family history of a particular ailment. Sometimes, 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 must pay the insurer’s remaining premium to stay insured. Even if you go to a new insurer company, the chances are high that they will determine the premium based on your life-related risks. So, instead of wasting more time, paying the difference and getting the policy is advisable.
Is it necessary to revise the information in the policy proposal form?
While filling out the application form, ensure you enter all the correct details. 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. 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. Therefore, it can become difficult for you to get insurance even from other insurers.
Secure your life as early as possible with term plans, as you never know what lies ahead. Do not hide any information to save money and jeopardize your family’s financial future. So, invest in an online term policy, as you can get it at a relatively cheaper premium than purchasing a plan via traditional means. You can seek a term plan calculator’s assistance to estimate the bonus you must shell out for your desired sum assured.’