term plan

Commonly Asked Questions About Term Insurance

When purchasing a term insurance plan, buyers often have a number of questions. In the event that individuals have more than one term insurance policy, they become uncertain about how claim settlement would proceed. Some people are uncertain about whether they would receive coverage outside of India. Some people are concerned that if they get a serious disease or start smoking after buying insurance, their policy won’t be legitimate. These are only a few of the many inquiries that come to mind when we need to buy a term plan

1. Would the cost of a term insurance policy purchased now fluctuate in the future? 

Unless otherwise specified in the offer document, a term insurance policy’s premium must stay constant for the duration of the policy as long as the policyholder does not request a modification. In other words, the policyholder must not become disabled or develop a (life-threatening) drinking or smoking habit. Upon notification of any such developments, the firm may impose a loading (increase in premium), changing the premium as a result. A term insurance calculator is a tool you may use online to determine the amount of coverage required based on your needs.

2. What would happen if someone decided to resume smoking after they had the policy for a few years? 

After purchasing the policy, if the policyholder develops a habit like smoking, drinking, or another behaviour that could shorten their life expectancy, they must immediately disclose this to the insurance company because they are now part of a new risk pool. If this occurs, the insurance provider may impose loading (an increase in premiums) on the current premium or even revoke the contract. It is crucial for the insured to notify the insurer of any such changes, as failure to do so could, in the worst-case scenario, result in the claim being denied.  

3. In the event of an accident passing away, are Term Insurance Claims Successful? 

In the event of an accidental passing away, term insurance does pay. Whatever the reason, the sum assured or cover amount would be paid upon the passing away of the insured (natural or accidental, or passing away due to some illness). Your term plan may benefit from one of the several riders (extra benefits) available, a permanent disability rider, and an accidental death benefit.

4. If a passing away happens outside of India, is life insurance still regarded to be valid? 

Term plans are absolutely valid, even if the passing away occurs outside of India. This information must have been shared with the insurer by the policyholder. He needs to let the insurance company know that he now resides outside of India. There is a clause in the insurance service that requires the policyholder to declare his impending international travel, just as he would with any other change of coordinates, such as phone number, address, or nominee.

5. What if I don’t pass away? 

When customers learn that their term insurance policy has no maturity benefit, they frequently become angry. 

If it worries you, you should endeavour to comprehend any potential alterations your policy might undergo as the term comes to a finish. Premium increase- For several years, the rates for many term plans have not increased (10, 20 and even 30 years, for example). You might have the choice to keep your policy as soon as that term comes to a conclusion. If you do, your premium will likely increase significantly. Term insurance plans also have term insurance tax benefits that can be availed of. Currently, there are 2 tax regimes in India – new and old. To get the tax benefit you desire, choose the correct one after consulting an expert. You can opt for a regime change during the next financial year.

6. How is claim settlement handled when an individual has many policies? 

In these situations, it is crucial to acknowledge in the proposal form that you already have a policy from firm ABC. (Each company’s proposal form has a separate column that customers must fill out if they currently hold another policy from the same or a different insurer.) Once all required information has been provided, the form should be submitted. The standard procedure must thereafter be to submit the Death Certificate to the insurance provider with whom the policy has had the longest history when it comes time to make a claim under the policy. After that, additional firms must be made aware of the required procedure, and they must then receive an acknowledgement from the first Company that was presented to them. A term insurance calculator is an easy-to-use tool to check the amount of premium you would have to pay

You all would benefit from knowing the answers to these FAQs as you choose a term plan.

Additionally, you should be aware that term plans also have term insurance tax benefits.

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