Term insurance plan is a life cover designed to protect your family’s finances from an untimely death or unpredictable incidents. When opting for a term insurance plan, several questions pop up in our minds, and if not resolved at the right time, we may end up buying the wrong term plan. So, here are answers to some of the most frequently asked questions to help you make a smart choice:
1. Will the Premium Change in The Years to Come?
The premium of a term plan remains the same through the cover period unless there is a clause mentioned in the document. If the policyholder develops life-threatening habits like smoking, drinking or any disability the company may alter the premium.
2. What Will Happen If the Insured Starts Smoking Few Years After Securing Himself?
If the person has developed habits like smoking or drinking, this will reduce life expectancy. Therefore, it is necessary to reveal this habit to your insurance provider at the earliest to avoid future hassles such as rejection of claim settlement.
3. Will the Policy Cost More If I Have a Smoking History?
Usually, there is a lower premium rate for non-smokers, but it totally varies from policy to policy, for instance, an ‘X’ insurance company may require an individual to disclose if he/she was a smoker or drinker, even if it was a past habit. Before applying, read the insurance proposal rules, thoroughly.
4. What about the Claim in Case of Accidental Death?
In case of accidental death of the insured, the sum assured will be paid successfully to the nominee. Additionally, there are various riders such as accidental death benefit, critical illness rider, and permanent disability rider to offer you better protection in your term plan.
5. Is Life Insurance Cover Valid Outside India?
In case of untimely death outside India, the term plan is very much valid. Also, if the policyholder has migrated to another country, he needs to inform the company to update information like phone number, address or nominee. But, if the insured is moving to a country that is considered unsafe or a war zone, for example, Afghanistan, Somalia, or Syria, then the company may not provide this facility. However, your life cover from a term plan is valid in countries like US or UK.
6. What If I Reach the Maturity of The Plan?
Often people have this question, ‘What if I don’t die?’ One needs to understand that as the policy reaches maturity date you can avail various options like retaining your policy or if you have lesser responsibilities you can opt for less coverage or upgrade your old term policy for a new cover.
7. What Is the Claim Settlement Process for A Policyholder Having More Than Two Policies?
In this scenario, one should provide information declaring possession of a policy from another company and then submit the form. The process during claimant is to submit the death certificate to the insurance company with whom the policyholder is associated for the longest time. Followed by informing other companies of the procedure due and an acknowledgment from the first company.
Lately, most insurance companies do not for ask an original death certificate; a photocopy of the certificate works to settle the claims.
8. How Do Insurance Companies Investigate Death?
If the claim happens within the first two years of purchasing a cover then the company does a thorough investigation. It is easier to settle a normal claim where the premiums are paid regularly and the policy term is for a long period (more than 10 years).
9. Can A NRI Purchase a Term Plan?
Yes, NRI’S can opt for a term plan, if they are Indian residents. The documents require address and age proof which shows where you belong in India. You can directly purchase the policy online and submit the documents, along with previous 3 ITR forms and medical test reports during your next visit to India.