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You might be faced with a plethora of questions when choosing a term insurance plan, right from the type of insurance to the doubts regarding the returns. So, here’s a list of 10 questions you should ask before buying term life insurance to end up choosing the best term insurance policy in India.
1. Does the premium amount change over time?
No, unless specified in any of the clauses. Also, if the insurer develops any disability or habit that is life threatening, the company may decide to change the premium amount.
2. Are there any changes to the insurance plan if the policy holder gets into the habit of smoking/drinking after buying it?
Since the habit of smoking and drinking decrease the rate of life expectancy, it is important that you reveal any such habits to the policy company even if you started smoking or drinking after buying it. The company may or may not increase your premium amount on declaring. Not revealing can cause breach of the agreement and might result in the policy getting cancelled.
3. Is the policy priced more for prospective clients who smoke?
The cost and the conditions vary from policy to policy. Some companies will want to know your smoking and drinking habits even if it was in the past whereas some companies consider you a non-smoker if you haven’t smoked in the past 3 years.
4. Can one claim term life insurance in case of accidental death?
Yes, it can be claimed if the insured dies in an accident. Some companies also offer extra benefits such as accidental death benefits, critical disability rider etc.
5. Can one claim the term life insurance cover if the death occurred outside India?
Yes, you can claim the cover or assured amount irrespective of the location of the death. However, the policy holder must inform the insurer if he/she is moving to India. The company might defer the benefits if the person decides to move to countries deemed not safe by the company.
6. What if the policy holder does not die?
Since most policies do not offer any maturity benefit, many might feel discouraged to buy one. However, many insurance companies offer you different options at the end of your term, you can upgrade your policy to a permanent one, renew it with a slightly higher premium etc.
7. How does the claim settlement work if an individual has over two policies?
In the event of death of a policy holder who has more than two policies, the claimant should mention the same while filling the form to claim the cover. In most cases, the death certificate to claim the cover should be submitted to the company whose policy was bought first and acknowledgement of the same should be sent to the other insurance companies.
8. How seriously do insurance companies investigate deaths of the insured?
It depends on whether it is an early claim or a normal claim. All policy companies have an initial period that varies from company to company that characterizes the early claim. If the claim is made in that period and the company has too much to lose, then it double checks everything before the claim is settled which other is easy in the case of normal claim.
9. What kind of deaths is not covered in term insurance?
Certain kind of deaths like deaths due to terrorist attacks or deaths due to natural disasters is not covered in term insurance. So read all the clauses carefully before buying the policy.
10. Can NRIs buy term insurance policies in India?
Yes, as long as you are a resident of India as the company might require age or address proof to see where you belong in India. And you need not visit India to do so as one can find and buy the best online term plan and submit the necessary documents on the next visit to India.
About HDFC Life
HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.
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