Let us try to answer some of the most frequently asked questions about term insurance.

Most Frequently Asked Term Insurance Questions

Here are the most frequently asked questions about term insurance.

Q1. Should I buy term insurance if I am not married?

You should buy term insurance only if there are dependents in your family. So, if you aren’t married but have dependent parents, you should buy term insurance, though for a less sum assured.

Q2. How much cover should I opt for?

Normally, it is suggested that the cover you opt for should be around 15-20 times of your annual income. In simple words, this is known as income replacement method. You can also calculate the amount with the expense replacement method. Moreover, you can go through the article and use our life insurance need calculator to determine the required coverage amount.

Q3. Till what age, should I buy term insurance cover?

You should buy term insurance cover till age 60 i.e. retirement age. If you’re interested in knowing the reason for the recommendation, click on the link given below.

Q4. Should I buy a term plan with return of premium (TROP)?

No, you should never buy a return plan with return of premium. It’s so because the premium is very high in such plans. For more information, you can read the complete review here.

Q5. Does the premium increase during the policy term?

No, the premium remains fixed throughout the tenure of the policy. Hence, the premium doesn’t increase during the policy term.

Q6. How many term insurance policies can I buy for myself?

You can buy as many term insurance policies as you want as it wholly depends on your income criterion. But it’s suggested that you should buy only one policy. Otherwise, your family would’ve to run from post to pillar in case the claim arises.

Q7. Can I get term insurance of 5 crores if my monthly income is 50,000?

No, you cannot get term insurance of 5 crores if your monthly income is 50,000. You must understand that there’s something called financial underwriting in insurance policies. Accordingly, you can get only get a sum assured around 15-20 times of your annual income. Nevertheless, some companies also offer sum assured around 25 times as well.

Q8. Can I buy term insurance if I am an NRI?

Yes, you can buy term insurance even if you are an NRI. Other than all the necessary documents, you should also have a passport with an entry stamp on it. Another thing to remember is that you cannot buy term insurance online while sitting in some other country. Also, insurance companies have a list of countries where term insurance cannot be given. If you are staying in such a country, there’re high chances that the company might reject your proposal.

Q9. Do I need to declare my profession?

Yes, you definitely need to declare your profession while opting for a term plan. A person working in oil rigs may have to pay a much higher premium than an IT professional. Similarly, the premium also depends upon how hazardous your job profile is.

Q10. Do I need to declare other policies?

Yes, you’ve to declare other insurance policies while taking a term plan as it’s required for determining your financial eligibility. Also, it helps the underwriter to see whether you’re eligible for the combined cover of all the insurance policies.

Q11. Can I get term insurance for my wife who is working?

Yes, you can definitely get term insurance for your wife provided that she’s working. Again, the eligibility for the term insurance policy will be determined on the basis of her income level.

Q12. Can you get term insurance for a housewife?

Yes, you can get term insurance for a housewife, though most of the insurers have capped the limit of the sum assured. Secondly, the condition is that the husband should be having the same amount of cover.

Q13. Can I get term insurance if I have some health issues like diabetes, Blood pressure, thyroid?

It totally depends upon the severity of the disease. Furthermore, the final decision would be in the hands of the underwriter who would be checking your proposal form. So even if you get it, the premium would be loaded.

Q14. Does drinking alcohol occasionally, say once/twice in a month, count as a drinking habit for the Term insurance?

It may not be counted as a drinking habit, but you should declare that you drink occasionally. It’s so because the underwriter can take a call on whether you need to undergo medicals or not.

Q15. Should I declare if I have stopped smoking/drinking long back?

Yes, you should declare it if you have stopped smoking/drinking long ago. In term plan, smokers usually pay 1.5 times more premium than non-smokers. Therefore, this comes under material facts which can be one of the major reasons for declining the claim.

Q16. What if I have started drinking after 3-4 years of taking the term plan or shifting to some other country after 3-4 years?

You do not have to declare any such thing to the insurance company once the policy is issued. On this account, any change need not be declared after issuance of the policy. If you are shifting to some other country which is black listed by the insurer, it is better to ask from the company if you need to declare.

Q17. Are tele medicals safe?

Yes, tele medicals are completely safe. The company decides to go for tele medicals if they find your proposal to be less risky. Besides that, insurance companies also have a norm called jet limits. The jet limits may be 50 lakhs, 75 Lakhs or even 1 Crore. It’s the underwriters who decide whether the customer has to go for tele medicals or an actual medicals test. While giving tele medicals, the entire conversation is recorded and you can also ask for a copy of the same.

Let us cover some more FAQs in next chapter.