In the fast-paced and ever-changing landscape of today's society, it's crucial to ensure that our financial well-being remains steadfast. And for those who rely on a regular salary, finding the delicate balance between immediate necessities and future aspirations can often feel like a never-ending tightrope act.
When it comes to financial safety nets, insurance plans like health insurance plans and term insurance plans shine bright. However, obtaining term insurance can be challenging due to the perceived risks involved with pre-existing conditions. It's important to know that not all insurers view pre-existing conditions the same way, and having a medical condition should not deter you from getting protection for your family.
In this article, let's explore term insurance, a simple and cost-effective life insurance option that ensures your family's financial needs are covered in your absence.
Understanding Term Insurance
By opting for term insurance, you can ensure that your family's financial needs are taken care of in your absence, without them having to make any sacrifices when it comes to their dreams and lifestyles.
This type of insurance offers coverage for a specific duration in exchange for a predetermined premium amount. In the unfortunate event of your demise during the active policy period, the insurance company will provide your family with a sum of money, commonly referred to as the 'sum assured'. Your family will be the recipients of the sum assured based on the claim payout option you selected when purchasing the policy.
Remember, term insurance solely covers the risk of unexpected events, which means it is considered a pure risk cover. If you happen to make it through the entire policy duration, no benefits will be paid out to you.
Term Insurance Application Process
The assessment phase before obtaining term insurance involves a series of steps conducted by the insurance company. You are likely encounter a series of questions during the application process that require your careful attention. These questions help the insurance company assess the level of risk you pose to them. This evaluation process, known as "underwriting," involves considering factors such as your age, income, lifestyle choices, and medical history.
It is also possible that some insurers will request you to complete certain medical tests. This requirement is based on factors such as the information you provide on your proposal form, your age, and the sum assured you have chosen. After this process, the insurance company will carefully review your application and take into account the information provided and/or medical reports, they will make one of the following decisions -
● They will accept your proposal and issue the policy, or
● They will apply loading, i.e., additional or extra premium, or modify the proposal if you are considered to pose a higher risk or non-standard life, or
● They will reject your application.
Key Considerations Before Applying For Term Insurance For Salaried Individuals Especially If You Have A Pre-Existing Condition
When applying for term insurance, especially for salaried individuals with pre-existing conditions, some critical aspects require careful consideration:
● Filling The Proposal Form Yourself: First and foremost for your policy to be issued, it is crucial to have a well-completed proposal form. This form serves as the base and foundation of your policy. Therefore, it is of utmost importance that you make accurate declarations and fill out the form yourself - instead of relying on someone else.
● Disclosing All Relevant Information: The insurance contract operates on the principle of utmost good faith. It is your duty to disclose all relevant information to your insurance company when purchasing the policy. If you have any pre-existing conditions or ailments, it is important to honestly inform your insurer. Openly share your current health status and past medical history. Remember that hiding this information will not benefit you, as medical tests can easily detect any such conditions.
● Being Transparent: With an objective to buy a cheaper insurance plan today, it is quite possible that your family could risk losing the claim money later if you do not make the correct disclosures. Hence, transparency is crucial when it comes to insurance. By honestly providing all the necessary correct, complete and true information, you can guarantee that your policy stays valid and that your loved ones will be financially protected if anything were to happen to you during the policy period.
Consequences Of Hiding Details
Failure to disclose relevant information, intentionally or unintentionally, can lead to hassles for your loved ones during the claim settlement process. Your loved ones may have to go through hassles and huge financial loss in case a claim under your term insurance plan arises and is repudiated/not settled by the insurance company due to improper or incorrect disclosures, moreover as you won't be there to support them if things go wrong.
So, what might seem simple at first can quickly become a stressful and paperwork-heavy task for your loved ones when they least expect it. If you forgot to inform your insurer about your health condition, it is important to let them know as soon as you realise it. Send an email explaining the situation, and they will review your policy to decide if they need to adjust the premiums, charge extra and/or cancel it altogether. Remember, it's better to be honest, pay the right premiums, and avoid potential denial of claims.
A Quick Tip!
If you have or are likely to have financial dependents in near future, or if you are contributing a significant share to household expenses and have outstanding debts, it would be wise for you to consider purchasing term insurance. Thinking ahead and investing in a term policy while you are still young and healthy is crucial. By doing so, you can reduce the chances of having your application rejected in the future in case you get diagnosed with a serious illness or disease and, at the same time, secure lower premiums.
By choosing this approach, you can ensure that you possess the necessary coverage, regardless of any future changes in your health. As you grow older, the likelihood of developing lifestyle-related health conditions increases, which can classify you as a higher-risk individual. Consequently, your term insurance premiums may rise or you may encounter challenges when attempting to secure coverage.
ABSLI Salaried Term Plan is tailored exclusively for you, a salaried individual seeking comprehensive protection. With the freedom to customise your plan according to your specific needs, this solution offers both lump sum and monthly income options. Whether it's ensuring your child’s education, maintaining a comfortable lifestyle, or meeting everyday expenses, this pure-risk term plan is designed to provide unwavering financial support. It empowers your family to embrace the future confidently in case the unexpected happens.
Some of the Key Features of the Plan:
➔ Choose from a diverse range of 4 plan options to match your unique protection needs as you seem perfect.
➔ Enjoy life insurance coverage that spans up to age 70.
➔ Select from versatile options for death benefit payouts, whether you prefer a lump-sum or monthly income.
➔ Additional protection with the inclusion of an inbuilt terminal illness benefit.
Wrapping Up!
It is crucial to be transparent and honest with the insurance company when trying to obtain term insurance. While it may be tempting to hide your medical and other details in an attempt to save money, it is important to remember that the truth will eventually come to light, resulting in unnecessary stressful situations for your loved ones. By being open about your health condition from the beginning, you can ensure that you are provided with the appropriate coverage and avoid any unnecessary financial burdens in the future. Remember, honesty is always the best policy when it comes to securing your family’s financial well-being.
1800-270-7000
21 February 2025
5 mins read
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