I have received numerous queries on online term insurance and every query seems to suggest that there is some confusion regarding this product. Most buyers are not very clear on the process and there is a good amount of apprehension on the claim settlement. Many agents too participate in spreading the confusion, knowingly or unknowingly, as they tend to loose business.
Here are 5 of such queries which has come to me and I have tried to clarified them –
The Claim Settlement Is Not Good
There is a good data available for claim settlement ratio of life insurance companies. Surely it will pertain to data collected through the term insurance policies sold for so many years and will mainly comprise of policies sold through agents because online term insurance was absence. This claim settlement ratio reflects how much efficient company are in settling the claims. For claims not settled there are different reasons which needs to be analyze more deeply. There is no reason to believe that an insurance company will hold claim in online term insurance just because it’s an online product. If information you have provided is very clear and company have issued you the policy the claim will be settled.
There Will Be No One To Help Your Family
In online term insurance the premiums are cheap and absence of agent’s commission is one of the primary reason. But there is a wide misconception spread that there is no one to help you and so family will face difficulty in getting the claim. This is not true. Even insurance companies have dedicated call centers for this segment where your queries are being answered and process being handled. When you avail an online term insurance the representatives from the company visits you for various documentation. In similar manner you can expect them to be working towards settlement of your claim. Yes you will not have any agent to rely upon to communicate with the company but then if you need it you can always avail an offline term insurance. But remove this misconception that only agent can get the claim settled.
The Insurer Deliberately Increase the Premium rates
No insurance company aims to do that. There is medical test done of the insured and only if the medical reports suggest anything the company underwriters takes a decision to increase the premium based on their risk assessment. If the medical reports suggest an increase in the premium there may be situation when your medical test conducted from other places may not reveal anything. In that situation communication can be done with the insurer and in some cases companies do reconsider.
There Is No Need To Declare Previous Policies
It’s dangerous. Your term insurance coverage eligibility is based on some analysis and insurance companies cannot let you in a situation where you benefit from the insurance. The purpose of insurance is to compensate the financial loss and do not make profits. So if you have previous insurance policies then the new company will calculate your coverage amount by taking those in consideration. If you do not reveal it then your total coverage amount may exceed the maximum eligible amount. In such cases the company later may reject the claim on basis of suppression of facts. So if you have already insurance policies running and have some life insurance coverage reveals all of them to the new insurer from which you are availing a term insurance policy.
Small Illnesses Do Not Matter
Insurance is based on Utmost Good Faith i.e. a faith imposed by both insurers an insured on each other. The company has a faith that you have revealed everything to them. Yes small things like fever etc. do not matter but any situation reached to the level of hospitalization should be reported to the insurer. Also, any seasonal illnesses if you carry should get reflect in your health declaration. Many a times agents advise you to suppress such information but they do it for their benefits. If you reveal, the process will get lengthier as company will asks for additional information. If due to any previous issues your policies gets rejected then it’s a loss to an agent. These situation are very common during last days of the month or last few months of financial year. To ensure polices is issued fast such advice is delivered. But for your benefit you should disclose every information related to your health. This will ensure company issues the policy with complete knowledge and tomorrow it cannot reject the claim on basis of it.
There may be many more queries which may be circling around. If so get a clear answer to them before you take any action. Term insurance is cheap, effective and a good tool for protection of your family from contingences. Avail it but with complete awareness.
Do you have any queries? Ask them today….