Important Questions to Ask Before Buying Term Insurance
A life insurance policy is one investment you make towards the well-being of your loved ones. When you purchase such a policy like a term plan, you ensure that your dependents can maintain their standard of living in your absence. If you are not confident about getting a term policy, consider asking the insurer these questions to clear any doubt.
- What is a term plan?
The term plan meaning is a life insurance policy that offers you cover for a fixed tenure. In the event of the policyholder’s untimely absence, the insurer pays the sum assured to the nominees. The plan does not offer a maturity benefit, which is why it is an affordable life policy.
- What happens if you have two policies?
If you have two term life insurance policies, the nominees have to make a claim to the insurer whose policy you bought first. Once the process is completed, they must inform the second insurer about the same and submit an acknowledgment collected from the first insurance provider.
- What happens if you survive the policy tenure?
If you outlive the term policy’s duration, the plan discontinues without any payable benefit. The insurers grant the option to renew the plan at an increased premium. If you feel that the insurance is still required, renew it to cover the uncertainty of life.
- Can Non-Resident Indians (NRIs) buy the policy in India?
An NRI can buy term plan online from an Indian insurance provider. The applicant has to submit documents proving that he or she has belongings in India along with the Income Tax Return (ITR) report. Additionally, he or she has to send the medical reports to the insurance company.
- What if you fail to pay the premium on time?
If you are unable to make timely premium payments due to any reason, the insurer will grant you an additional period to do so. However, if you still fail to pay during that time, the policy will lapse. A revival of the term plan is possible by paying the penalty along with the due premium.
- What happens if you start to smoke?
When buying term plans, you have to declare if you are a smoker, as insurers set the premium based on that. If you were a non-smoker when buying the policy but start to smoke later, it is vital to inform the insurance provider. They will readjust the premium accordingly. Failing to disclose will lead to a claim rejection when the insurer finds out about the truth in the future.
- How long should be the policy tenure?
The term of the cover depends on your necessity. The purpose of a term policy is to offer you a life cover. You have to decide until what age the cover should remain active. Use a term insurance premium calculator to get an idea about the cost depending on your chosen sum assured and tenure.
- When should you buy a term plan?
Insurers charge a lower premium to healthy policyholders who do not have any concerning medical issues. So, it is best to opt for a term plan when you are young. The older you get, the higher the premium will be.
- Is it possible to change the term policy’s tenure?
The term plan meaning is a life insurance policy that stays active for a fixed period. You need to decide the duration of the cover while purchasing the plan. Once fixed, there is no option to change the tenure.
- Can you buy the policy for someone else?
You can purchase a term plan for yourself and separate plans for your family members.
Before buying a term policy, use a term insurance premium calculator to quickly compare different plans’ prices to find a cost-effective one.