Question 1

What is Term Insurance?

Accepted Answer

A term insurance plan provides financial security to the family in the unfortunate demise of the policyholder. A death benefit is paid to the appointed nominee only if the death occurs during the term of the policy. If the policyholder survives the term, no maturity benefit is paid. A term insurance plan will safeguard your family against any kind of loans/ liabilities you’ve taken in case you pass away, and help them to maintain their standard of living by financially indemnifying them. Further, the premiums for term plans are very cheap compared to other life insurance products.

Question 2

What is Online Term Insurance?

Accepted Answer

Term insurance plans that the insurance companies sell online are known as online term insurance plans. With just a few clicks and a stable internet connection, you can directly buy a term insurance policy online from the insurer of your choice, at your convenience.

Question 3

Why should you buy Term Insurance?

Accepted Answer

Term insurance could sometimes be overlooked among other insurance products in the market. The main reason for this is that term insurance plans do not offer any maturity benefit, in case the insured person survives the term. This, for a common user, might seem like a poor investment choice.  However, this is not true.

Question 4

Why should you compare Term Insurance Plans?

Accepted Answer

There are no second thoughts about the fact that term insurance is one of the best insurance plans you can invest in, if you have any family member that relies on the money you make, for their expenditures. However, term insurance plans vary from insurer to insurer and are based on several factors such as - features, benefits, premiums, customer service, claims experience, reliability, and drawbacks. Purchasing a term insurance policy that suits you and your family’s financial needs is an important decision you’ll have to make for your family’s future.  Hence, doing some research and a proper comparison is necessary to choose the right policy for you.

Question 5

When is the right time to buy a Term Insurance Plan?

Accepted Answer

The general thumb-rule people follow is - the earlier you buy term insurance the better. But, one should remember that the only purpose of buying term insurance is the financial security of their dependents. So, it would be meaningless to purchase it when they don’t have any financial dependents.  Hence, the right time to buy term insurance is as soon as you have or plan to have financial dependents. If you have taken or plan to take a large financial loan, which your family will need to pay off in case your death happens. Insurers charge a premium based on the age at which you start the policy, and then it remains constant, throughout the term. So, if any one of the above two things is true in your case, you should buy a term insurance policy as early as possible, to enjoy life-long low premiums.

Question 6

What is the minimum income to buy Term Insurance?

Accepted Answer

If you want to invest in a regular term insurance plan, at present you should have an annual income of at least Rs. 2 lakhs, however, these rules keep changing from time to time.

Question 7

Can I get myself insured under the Term policy if I have diabetes?

Accepted Answer

Insurers look at each proposal on a case-to-case basis. You should be upfront about your health condition and provide all available documents, records required - ensuring transparency before you buy the policy.

Question 8

Do I need to declare myself as a tobacco user if I smoke occasionally?

Accepted Answer

Even if you smoke occasionally, you should declare yourself as a tobacco user because if you try to withhold information and the insurer finds out about it later, he may charge an extra premium. The insurer might even cancel your policy and deny the policy benefits.

Question 9

Why are premium rates higher for smokers than non-smokers?

Accepted Answer

Compared to non-smokers, smokers have higher chances of getting cancer and other smoking-related ailments which increases the risk of early death. Since the possibility of a claim is higher in such cases, premium rates to are higher for smokers than non-smokers.

Question 10

What would happen if I start smoking or consuming alcohol after the policy issuance?

Accepted Answer

Your base policy cover will not get affected if you start smoking or consuming alcohol after the policy is issued. As per the terms & conditions of the policy, there is no requirement to inform the insurer about it.

Question 11

If a person dies outside India, will the nominee still receive the death benefit?

Accepted Answer

If the policyholder dies during the policy term, the nominee is entitled to receive the death benefit compensation, irrespective of the place of death of the policyholder.

Question 12

Can I change the duration of life cover after the policy is issued?

Accepted Answer

No, you cannot change the duration of life cover after the policy is issued. Purchasing a fresh policy with a longer duration is the only option if you want to increase the policy duration.

Question 13

Can I increase my Sum Assured after the policy is issued, during the policy tenure?

Accepted Answer

If you buy your policy with the life stage benefit or the increasing cover feature, you can increase your sum assured during the policy tenure, after the issuance of the policy. Otherwise, a manual upgrade will involve buying an additional, separate term insurance plan.

Question 14

Is it possible to add a rider to my existing term policy?

Accepted Answer

While some insurers allow riders to be added only at the time of buying the policy, some insurers allow you to add a rider to your existing policy after charging a nominal cost.

Question 15

How much time does it take to settle any claim?

Accepted Answer

The procedure of claim settlement varies from insurer to insurer. As per IRDA guidelines, the insurer must settle the claim within 30 days after all the necessary documents are submitted.

Question 16

Can we claim Term Insurance from two companies?

Accepted Answer

If you have disclosed complete details of your first policy to the insurance company from whom you have purchased the second policy, you can claim term insurance from two companies.

Question 17

What is underwriting?

Accepted Answer

Underwriting is the process by which institutions or individuals take up financial risk in exchange for some price. It involves evaluating the proposal, assessing the risks, establishing proper premiums, and taking responsibility for a policy by agreeing to pay in case of any damage or loss.

Question 18

Can I change my nominee after the issuance of the policy?

Accepted Answer

Yes, you can change your nominee after your term insurance policy has been issued. You can contact your insurer and ask him about the process to do so. Mostly, all you need to do is fill out the nomination form and submit it to your insurer.

Question 19

What is Section 45 of the Insurance Act?

Accepted Answer

Section 45 of the Insurance Act safeguards the interests of the policyholders. It states that a life insurance company cannot reject or deny any claim, for any reason after 3 years of issuing the policy.

Question 20

Do life insurance companies check my medical history? What medical conditions will affect my term insurance premiums?

Accepted Answer

Yes, insurance companies check your medical history when you apply for the policy. Your premium rates might be affected if you or your family have a medical history of life-threatening or chronic diseases, or if your present medical condition indicates a future health issue.

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