I will continue as if this is a continuation of a previous chapter on term insurance FAQs.. Here are some more frequently asked term insurance questions.
Q18. Which option should I choose for Sum Assured – lump sum or income options?
You should always go for the lump sum option for these two essential reasons.
- Income option is not inflation adjusted.
- Time value of money.
Q19. Is there any option of increasing cover every year?
Yes, there’re some companies that provide you with the option of increasing cover every year. For example, ICICI Prudential allows you to increase cover during certain life-changing events like getting married or having a child. Whereas, HDFC Life gives you the option of increasing some percentage of cover every year.
Q20. Should I opt for riders like personal accident and critical illness in term insurance?
No, you should buy it from general insurance companies. The reason being that if you opt for riders in a term plan, the conditions and rules are extremely strict.
Q21. Can I change the nominee?
Yes, you can change the nominee at any point of time during the tenure of your policy.
Q22. What if I stop paying the premium in between?
the You will be given a grace period to pay the premium after the last date of premium payment has passed. Once the grace period is over, the policy will be invalidated and no benefits will be paid.
Q23. What if I take term insurance when I am employed in India — then after some years I take up employment abroad?
The term insurance will still be valid in this case provided that you take the term insurance in India itself.
Q24. Are small companies safe to buy term insurance?
Yes, it’s absolutely safe to buy term insurance from any life insurance companies irrespective of their size. All the companies are regulated by IRDAI.
Q25. What if I lose my job and die after that then how much will this term plan pay?
It does not matter whether you lose or quit your job once the term plan is issued. It’s just that you have to pay the premium regularly. Moreover, the amount would be settled to your nominee if you had paid all the premiums before your death.
Q.26 Does Life Insurance covers death outside India?
Yes, if a person had purchased life insurance in India and had died in some other country, the sum assured would be paid to the nominee.
Q27. Does Term Insurance pay in case of Accidental Death?
Yes, the basic sum assured is paid in term insurance if death has occurred due to an accident. If you had opted for a personal accidental rider, you’d get the sum assured in accidental riders along with the base cover. Nevertheless, there can be variants in such scenarios. For instance, if you’re driving while drunk and die in an accident, only the basic sum assured will be paid. Accidental rider sum assured would not be paid in this case.
Q28. Is death due to critical illness, like cancer is covered under the term insurance policy?
Yes, a death which results from critical illnesses such as cancer is covered under the term insurance policy.
Q29. Will I get a claim if I commit suicide?
Suicide is covered after a time period of 1 year. So, no claim is paid in case a person commits suicide within 1 year of purchasing the policy.
Q30. Are natural calamities covered under term insurance?
Unless exclusively mentioned, natural calamities are normally covered under term insurance.
Q31. Does claim settlement ratio matter?
No, claim settlement ratio does not matter in today’s time. Ten years ago, people used to run after LIC because of the claim settlement ratio. As of now, approximately all the companies have claim settlement ratio of more than 90%. Also, your claim cannot be rejected after a time period of 3 years on any grounds.
Q32. What are the documents required for death claim?
Please refer to the article mentioned below for the checklist of death claim documents.
Q33. Should I review my term insurance?
Yes, it’s extremely important to review your term insurance before you make the investment. It’ll help you check whether it would be sufficient during life-changing events like getting married, taking a home loan, etc.
Q34. Which is the best term insurance policy?
Please don’t ask me this as there’s no definite answer for such a question. Speaking of the best term insurance policy, it’s more of an individual choice and depends on your requirements. Therefore, choose a brand you’re comfortable with, verify policy terms, and the chances of claim rejections would be very less.
Final Words
Now that your queries regarding life insurance policy have been addressed, it’s imperative that you take the right decision. Last but not the least, feel free to get in touch and share your valuable opinion with us.
