This image shows a Truth-o-meter. A simple but powerful device. With it, you can get a Guarantee – that if you are completely honest with your term life insurance plan application, a 100% confirmation that the life insurance claim will be paid to the your nominee in the case of your death. But there is one condition – all the while during the term life insurance application process, your truth-o-meter needs to show green, i.e. you will be going with the Truth and nothing else, when buying your term life insurance plan. Believe us when we say it will be worth it.
Oh, and another thing. If you truth-o-meter is orange or red, there is neither a Guarantee, nor a second chance! You will be gone, and with it, all the dreams that you had for your family. Hmm, not a good situation.
So now that we have your attention and hopefully your confirmation of quoting the truth, here’s how you need to go about buying your term life insurance plan.
Filling up the Application Form for Term Life Insurance
Whatever kind of a person you are otherwise, when you are buying a term life insurance policy, make sure you are a Gandhian! The term life insurance policy you buy will not be worth it if when you fill up the application form, you choose not to disclose anything as follows…
- about all the life insurance policies you already have or that you may be buying in parallel from the same/another insurance company
- something you feel is small or insignificant (let them decide if it is),
- some unhealthy habit,
- something you may be embarrassed about,
- some hazard that you face regularly (because of your occupation like being a pilot or an adventure sport like diving), or
- some adverse medical/health condition that you feel may lead to increase in premiums or perhaps denial of the policy.
Ensure that you double-check key inputs in the application form such as gender, date of birth, lifestyle and habits (smoking, exercise, drinking, etc.), your income details, and family history.
Most Important : If you have an agent (most agents unfortunately do not recommend this product), you may want to go through him/her for your term life insurance policy. Not a problem at all (but do check the premium rate, online term life insurance is much cheaper). There are some agents who cut short the application form filling process (to make it easy for them) by filling in just your basic information such as your name, your address and your date of birth. They will then ask you to sign the last page of the form. In doing so, they fail to fulfill their responsibility as a primary underwriter in life insurance who moral and professional duty is to inquire and mention your complete medical history in the form. This will be disastrous if some fact is omitted or mis-represented by the agent. Now you need to remember that this is a term life insurance policy – not just an investment or savings plan (in which the worst is that you lose your premium).
For a term life insurance policy, it is in your interest (not the agent’s) to ensure that all information is declared correctly and all requested documents are submitted. So make sure that you fill every detail in the application form yourself only. We are sure you don’t want something to go horribly wrong for some silly error! Preferably, buy online.
Submission of Documents
When applying for a term life insurance policy, in addition to the application form, the insurance company may ask you to submit documents such as Age Proof, Identity Proof, Income Documents and also a scanned recent photograph. Do ensure that everything is submitted (or uploaded in case you are doing it online) and also make sure that they are all clear and readable. This is important for not just speedy processing but ensuring that there are no problems at a later stage, especially in case of a claim.
Medical Tests
There is generally no medical test for life cover up to Rs. 25-30 lakhs, for a healthy person when you buy a term life insurance policy. The limit can vary with age and the insurance company. Beyond that limit, medical tests are mandatory since the insurance company is taking the high financial risk of your life.
Most of the medical tests are now done at home, however, if you cover is high and if either/both of X-Ray and TMT (Treadmill Test) is required, you may have to visit a nearby medical center.
As part of the medical test, you will meet a doctor or paramedic (a licensed healthcare professional appointed by the insurance company) at a pre-fixed date and time (generally in the morning). The doctor will…
- ask and reconfirm your complete medical history including any conditions, surgeries and any prescription medications that you have had earlier or are having now
- check lifestyle habits that can potentially affect your health (such as exercise, smoking, drinking, recreational drug use, frequent travel or high-risk hobbies) and the company’s decision
- check about your family’s medical history(including parents, siblings, spouse, children)
- check your height and weight (ensure you have mentioned it accurately in the form, accuracy of this information is extremely important)
- check blood pressure, pulse-rate
- take a blood sample, urine sample (in certain cases, you need to take both these samples twice – once early in the morning before breakfast, and once 2 hours after breakfast)
- for very high life insurance cover, perform more tests such as AIDS, Australian Antigen Test (a blood test), chest X-ray, an ECG (or a 3-D Echo-cardiogram) for heartbeat, and a 20-minute treadmill test.
While all these may sound intimidating, you shouldn’t bother so much since they will not take too much time. In any case, getting a health check up done is not a bad thing at all, right?
You must declare everything and answer every question honestly to the medical examiner. Even if there is something that he/she is missing, point it out and ensure it is noted. It could be a reason for claim rejection later.
Term Life Policy Issuance
Once your application form and medical reports are checked by the insurance company, your term life insurance policy application will either be approved or denied. This takes 5-7 working days (after the medical test) depending the company. Sometimes, the insurance company may request more information either from you or your doctor in case there is something adverse/missing in your medical report. You could also have to go through additional tests in some extreme cases, or be asked to pay a higher premium to get the policy. The company sometimes may also limit your insurance cover.
Sorry this has become a long article. But if you have read it all, you are now ready to apply for your term life insurance policy.
Yes, it is. But Himanshu, we hope you are not depending on a rule that can change or get modified any day.
Thanks for your response. Can you also explain the clause of 3 years after which they can’t question any terms of policy while giving claim. Is it correct?
Yes, there is a possibility of rejection, Himanshu. There are multiple factors at play and rejection is a very case-to-case based issue.
Anyway, we are glad you’ve realized the issue. Inform the insurance company immediately. In all probability, they will continue the contract because it is an indirect factor and not a direct one. But that is the underwriter’s call. In case they do accept it, ensure that it is endorsed on the policy document or you have a clear communication from them on that in writing. Keep your nominee informed about that.
In the worst (and unlikely) case, they may revoke the contract. Not to worry. Just buy a fresh policy and make sure you declare everything. Better to be safe than sorry.
Hope this helps you, Himanshu. Here’s a link to compare term insurance plans before you buy them.
https://www.mintwise.com/term-insurance-compare
Cheers.
Thanks for a good post. I have a question.
I took an Term Insurance. However I missed to mention one thing about my family history. My father has diabetes and heart problem. I mentioned about heart disease but missed diabetes. Can this affect claim process if required later. What should I do now to ensure that my family gets claims whenever required.
While there is no life cover in a pension plan, you are still paying premiums on them. It is prudent to mention. There’s no harm in doing so anyway.
Great article on Term Insurance. Please tell me – if I have 3 LIC policies and they are not insurance policies but pension policies, do I need to mention in my term insurance application form? thanks mintwise
Varun, as an individual you can buy up to a certain multiple (generally 20x, depending on age) of your annual income. Sum Assured of existing policies reduce the effective new insurance cover that you can buy. However the original multiple is generally adequate. In your case, if the SA of existing policies is low and if you are buying before this policy lapses, then please declare it – it will hardly make a difference. And it is also the technically correct thing to do – you don’t want a claim to be denied for such a small reason, right?
We see no reason why PNB Metlife is not a great insurer to buy from. If their product meets your requirements, just go ahead.
Thanks for this article. I have a query.
I have an existing term plan having low sum assured value for which yearly premium is due (Due date was 9th Dec’15) and will expire in few days in I don’t pay the premium in 30 days.. I want to switch to a different insurance company and discontinue the old one. Do I need to declare about my old policy.
Also can you suggest if PnbMetlife is a good company to buy a term plan?
Thanks.
Great article. Everyone buying a term insurance plan must first read all this important things. it will really help to understand the expectations. nice, mintwise.
No, it is not likely to affect your term insurance premium rates. But it is a critical information as far as disclosure is concerned. You must disclose this, and everything else as well, honestly.
No, it is not likely to affect your term insurance premium rates. But it is a critical information as far as disclosure is concerned. You must disclose this, and everything else as well, honestly.
Tassavur, your father’s policy will either be issued at very exorbitant premium rates, or denied outright.
Non-disclosure is never an option.
We wish your father a quick recovery and good health.
Tassavur, your father’s policy will either be issued at very exorbitant premium rates, or denied outright.
Non-disclosure is never an option.
We wish your father a quick recovery and good health.
My father has cancer, will this have any effect on a term insurance policy I buy? How exactly? And is it alright if I do not disclose this information?
My father has cancer, will this have any effect on a term insurance policy I buy? How exactly? And is it alright if I do not disclose this information?
Saurav, this is a common and valid question. Unfortunately, most companies handle such cases in their own unique way and there is no generic answer that we can provide.
But given the fact that you already have a policy which you took as a smoker, we suggest the following approach even if you are taking the new policy with a different company,
When applying for the new policy, mention that you are currently a non-smoker but in the health questions section ensure that you fill in the fact that you quit smoking 2 years back. Also do ensure that there is a medical test and that your cotinine test is conducted. In all probability, the levels of nicotine in the urine will generally decide whether you will be charged smoker or non-smoker rates. We are suggesting this approach because you need to be honest when buying a term plan – better safe than sorry.
Another option is to go for a term insurance policy which has same rates for smokers and non-smokers – Future Generali Care Plus or ICICI Pru iCare 2, but they could be a little expensive.
Saurav, this is a common and valid question. such cases in their own unique way and there is no generic answer that we can provide.
But given the fact that you already have a policy which you took as a smoker, we suggest the following approach even if you are taking the new policy with a different company,
When applying for the new policy, mention that you are currently a non-smoker but in the health questions section ensure that you fill in the fact that you quit smoking 2 years back. Also do ensure that there is a medical test and that your cotinine test is conducted. In all probability, the levels of nicotine in the urine will generally decide whether you will be charged smoker or non-smoker rates. We are suggesting this approach because you need to be honest when buying a term plan – better safe than sorry.
Another option is to go for a term insurance policy which has same rates for smokers and non-smokers – Future Generali Care Plus or ICICI Pru iCare 2, but they could be a little expensive.
I used to smoke till 2 years back. Since then, I have not had a single puff and I don’t intend to in the future. I have an old Term Plan that I had taken when I used to smoke and I had classified myself as a smoker. Now, I want to buy another plan to increase my cover. What should I declare myself as? There is no option where it asks for specific details. If I declare myself as a non-smoker, does it contradict my old plan?
I used to smoke till 2 years back. Since then, I have not had a single puff and I don’t intend to in the future. I have an old Term Plan that I had taken when I used to smoke and I had classified myself as a smoker. Now, I want to buy another plan to increase my cover. What should I declare myself as? There is no option where it asks for specific details. If I declare myself as a non-smoker, does it contradict my old plan?
No.
“I don’t know” will not be available as an option to this question in the application form.
No.
“I don’t know” will not be available as an option to this question in the application form.
Suppose I develop a life threatening illness after taking the policy. Must I inform the insurance provider?
Suppose I develop a life threatening illness after taking the policy. Must I inform the insurance provider?
In reply to a question like “do you have diabetes?” would it be better to reply “I don’t know” even if I believe that I do not have it?
In reply to a question like “do you have diabetes?” would it be better to reply “I don’t know” even if I believe that I do not have it?
its worth reading article and touches all the corner of term plan frame.
its worth reading article and touches all the corner of term plan frame.
ha ha! great answer, mintwise!!! 🙂
ha ha! great answer, mintwise!!! 🙂
Very informative article focusing many aspects of term insurance.
Very informative article focusing many aspects of term insurance.
This is a must-read article for term plan buyers in India. actually every article is superb and writing style is very simple and interesting. humorour also. nice work from the mintwise team.
This is a must-read article for term plan buyers in India. actually every article is superb and writing style is very simple and interesting. humorour also. nice work from the mintwise team.
The article is very informative & very helpful (impartial).
The article is very informative & very helpful (impartial).
Sonu,
If you spend less than 1% time with your spouse doesn’t mean you are not married. Please declare your smoking habit and mention the frequency. God forbid, if a claim were to really happen, you don’t want it to be denied just because of a few rupees more, right?
If you are really worried about cost of premium, choose a term plan which has common pricing for both smokers and non-smokers, e.g. Future Generali, ICICI Prudential.
Sonu,
If you spend less than 1% time with your spouse doesn’t mean you are not married. Please declare your smoking habit and mention the frequency. God forbid, if a claim were to really happen, you don’t want it to be denied just because of a few rupees more, right?
If you are really worried about cost of premium, choose a term plan which has common pricing for both smokers and non-smokers, e.g. Future Generali, ICICI Prudential.
Hello I’m not a habitual smoker but for the past couple of years do end up a smoking a cigarette or 2 a month, especially after a drink. I’m in no way addicted & I’ll even stop this occasional indulgence if it means paying a lesser premium. The last time I spoke must be a good 14-15 days back. So don’t think there’s a chance for the medical test to detect anything. Given my determination to even kick this minor indulgence of mine, would u say I can claim myself to be a non-smoker, which I indeed am if you talk in general terms.
Hello I’m not a habitual smoker but for the past couple of years do end up a smoking a cigarette or 2 a month, especially after a drink. I’m in no way addicted & I’ll even stop this occasional indulgence if it means paying a lesser premium. The last time I spoke must be a good 14-15 days back. So don’t think there’s a chance for the medical test to detect anything. Given my determination to even kick this minor indulgence of mine, would u say I can claim myself to be a non-smoker, which I indeed am if you talk in general terms.
Nice article. Thanks for your help and effort !!
Nice article. Thanks for your help and effort !!
Amit, firstly thanks for your kind words.
Your decision to buy a term plan is excellent. Go for it as soon as you can. Your queries responded here below.
1a and 1b. Absolutely perfect. Can’t advise any better. But after you take your 1 cr term plan, you need to review your needs after 3-4 years. Our guess is that you may need to top up some more over time.
2. Mainly there are 3 kinds of additional benefits covered by riders – Accidental Death, Disability or Critical Illness. Each will have a separate Sum Assured and that is always in IN ADDITION to the main term plan Sum Assured. We strongly recommend Accidental Death Benefit rider since accidents are a matter of chance and you should cover for it. It is very cheap as well. We would also recommend a CI rider, especially if you do not have a comprehensive Health Insurance cover or Mediclaim.
3. Single premium is a good option too. If you find it convenient, go for it. But remember that this will take away the flexibility to shift to another insurance company mid-way just in case you feel the need to do so.
4. No insurance company checks CIBIL Report for underwriting a life insurance cover. Your CIBIL score therefore does not matter.
5. You don’t need to ask anything. Just go online and apply for the plan you choose. And be transparent. That’s it.
If you still have queries, respond back on this forum. Good luck, Amit.
Amit, firstly thanks for your kind words.
Your decision to buy a term plan is excellent. Go for it as soon as you can. Your queries responded here below.
1a and 1b. Absolutely perfect. Can’t advise any better. But after you take your 1 cr term plan, you need to review your needs after 3-4 years. My guess is that you may need to top up some more over time.
2. Mainly there are 3 kinds of additional benefits covered by riders – Accidental Death, Disability or Critical Illness. Each will have a separate Sum Assured and that in IN ADDITION to the main term plan Sum Assured. I strongly recommend Accidental Death Benefit rider since it a matter of chance and you should cover for it. It is very cheap as well. I would also recommend a CI rider, especially if you do not have a comprehensive Health Insurance cover.
3. Single premium is a good option too. If you find it convenient, go for it. Remember that this will however take away the flexibility to shift to another company mid-way just in case you feel the need to do so.
4. No insurance company checks CIBIL Report for underwriting a life insurance cover.
5. You don’t need to ask anything. Just go online and apply for the plan you choose. And be transparent. That’s all.
If you still have queries, respond back on this forum. Good luck, Amit.
Hello Sir,
I must congratulate and thank you for providing such a critical information with such a easy way. Please keep doing service to humanity like this. We all wish your success and peace in life.
I was wondering if you could also help me in clarifying my confusion.
About me :
Age 32 years.
Socially Smoker and Drinker.
Married.
Single earner.
No kids(not even planning)
Working in an IT firm(Bangalore).
Annual Income : 17 LPA
PPF investment 1 lac per year(accumulated 7 lacs by now)
NSC investment around 1.5 lac
Savings in account around 3 lacs
I have a home loan(HDFC Ltd) of 24 Lac.
Now my questions :
1). I am thinking of two term insurances.
(a). 25 lacs for 5 years(called Reducing type I guess) and from any cheapest premium provider company(Say Aegon Religare). I decided this because I am targetting my loan closure in 5 years from now. And once loan is closed, I will close this policy too.
(b). 1 Crore for longer period(say 30 years). This would be the one I would continue life long. I would choose some front runner for this(Say ICICI Prulife, HDFC Click2protect or LIC).
Am I thinking right or any advice for me?
2). I am totally confused about riders, I am completely failed to understand what are they, if they are included in package or not, if rider’s sum is extra on sum assured or is part of total sum assured. Any complete explanation/guide/article would be of great help!
3). I am also inclined towards single shot premium to avoid future tensions. In my stream we change companies almost every 2 years, bank account changes and so on. Please shed some light on it as well.
4). Also my CIBIL report is not that great, I do not get credit cards etc. Only I know how much pain I went through to get my home loan sanctioned. Would bad cibil report create any problem in getting term insurance?
5). If I get in discussion with some call center agent of any insurance company, what are those tricky questions I should ask to get all the important information extracted from them. Any sort of checklist you know.
At last I would thank you in advance for answering my queries and god bless you.
Amit Saxena
Hello Sir,
I must congratulate and thank you for providing such a critical information with such a easy way. Please keep doing service to humanity like this. We all wish your success and peace in life.
I was wondering if you could also help me in clarifying my confusion.
About me :
Age 32 years.
Socially Smoker and Drinker.
Married.
Single earner.
No kids(not even planning)
Working in an IT firm(Bangalore).
Annual Income : 17 LPA
PPF investment 1 lac per year(accumulated 7 lacs by now)
NSC investment around 1.5 lac
Savings in account around 3 lacs
I have a home loan(HDFC Ltd) of 24 Lac.
Now my questions :
1). I am thinking of two term insurances.
(a). 25 lacs for 5 years(called Reducing type I guess) and from any cheapest premium provider company(Say Aegon Religare). I decided this because I am targetting my loan closure in 5 years from now. And once loan is closed, I will close this policy too.
(b). 1 Crore for longer period(say 30 years). This would be the one I would continue life long. I would choose some front runner for this(Say ICICI Prulife, HDFC Click2protect or LIC).
Am I thinking right or any advice for me?
2). I am totally confused about riders, I am completely failed to understand what are they, if they are included in package or not, if rider’s sum is extra on sum assured or is part of total sum assured. Any complete explanation/guide/article would be of great help!
3). I am also inclined towards single shot premium to avoid future tensions. In my stream we change companies almost every 2 years, bank account changes and so on. Please shed some light on it as well.
4). Also my CIBIL report is not that great, I do not get credit cards etc. Only I know how much pain I went through to get my home loan sanctioned. Would bad cibil report create any problem in getting term insurance?
5). If I get in discussion with some call center agent of any insurance company, what are those tricky questions I should ask to get all the important information extracted from them. Any sort of checklist you know.
At last I would thank you in advance for answering my queries and god bless you.
Amit Saxena
this article came just in time for me since i am just going to apply for an online term plan. thanks.
this article came just in time for me since i am just going to apply for an online term plan. thanks.