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Thinking about Buying a New Life Insurance Policy?

Submitted by admin on June 19th, 2024

I am curious especially in understanding what is meant by a term plan? or do you already have one for purchase? The following are some important clauses to be aware of:The following are some important clauses to be aware of:

Disclosures

It is necessary to tell the truth about your existing health condition and your inherited health concerns of all your relatives. This includes the background of the disease, current medication,health histories of the first degree relatives, and, if there is, causes of death. It is better to get proper disclosure and declaration when purchasing the insurance since failure to disclose is often deemed as a basis for invalidity of the insurance claim. If you bought the insurance without paying much attention to the small letters, you can simply email customer service to help change some details. Before claims are settled or while in the process, certain hitches may occur, so it’s advised to have a printed copy of your policy.

Ratio of Claim Settlement

The mostly offered life insurance is marked by a company’s ability to cater to several claims, with the industry’s average claim settlement standing at 97%-99%. This could just be a way of luring more customers to join them. Excluded are the sheer volume of repudiated claims as well as the split of the claim between retail policy and group insurance. For this reason, do not get carried away by the figures that depict the industry’s overall claim settlement ratio.

False representation

It is suggested that the misrepresentation clause should be highlighted. This includes physical activities such as hiking, skydiving, parasailing bungee jumping, drug or alcohol consumption smoking and family medical history. It should be so noted that choosing the representative to deal with is a very important factor when it comes to buying life insurance.

Bureau of Insurance Intelligence

The Insurance Intelligence Bureau which is the insurer’s digital archive of policies from diverse insurance companies is the one that first receives the insured’s data before a life insurance policy is tendered. This means that it is unlawful to obscure the current policies. It is crucial to tell the truth since making multiple applications with insurers will lead to exposure of this act.

Women’s Lives

Wives or daughters are often depicted as having an interest in the family firm only when the firm is corporate and are often referred as housewife or non-earning contributors when applying for life assurance. This can lead to rejection of the claim as a consequence of this wrong disclosure. If a woman earns a considerable amount of money that helps support her home, then she requires term insurance.

Rider for Critical Illness

If you select term life insurance then you should even consider adding on the critical illness rider. Understand that some of those plans are closer to the critical illness rider and the sum insured base is dissimilar. As an illustration:

Mr. R invest in a term insurance plan for Rs.2 crores with an optional critical illness add-on of Rs.50 lakhs. The term life insurance perseveres and for a critical disease, a holistic sum of Rs. 50 lakhs is paid. The nominee gets 2 crores rupees to get by in case of death.

Critical illness like unemployment, death, terminal disease, dismemberment, or total and permanent disability sometimes reduce the total amount of payout to Rs. 1. Flipping through the Financial protection section, It says 50 crores are covered where there is 2 crores of term coverage and 50 lakhs for critical illness.

It can lead to issues if this phrase is misunderstood; E, thus ensure one reads the policy wordings well.

Responsibility to the Customer

Customers are now supposed to report, state, and affirm their earnings, health, medical history, family medical history, diseases in the family, and causes of death, and hobbies. Regarding any changes that have been made on the proposal form and with regard to the settlement of claims, the insurance companies have the right to reject claims. Customers should so fill the proposal form on their own and not seek assistance from others who might influence the results.

This means that if any member of the family dies, especially one who was a breadwinner, the family will receive something to keep going when the policy holder buys the term life insurance policy. It becomes important for you to understand all these provisions so that your family’s future is safe, and you are making a wise decision.