5 Things to do after buying online term insurance

We all know the common suggestion that never mix insurance with investment. In addition, we know that we must have a term insurance. Hence, we buy a term plan. However, what are the things that you need to take care after buying an online term insurance?

5 things to do

Buying an online term insurance is not an END. But the start of financial planning. Below are five points which are very much important for online term plan holders.

1) Inform your buying with a spouse or nominee-

This is very much important. Especially, in case of term insurance and that too with online term insurance. You have to share the information like how much sum insurance you bought, term, premium, and the company or product name. This relieves you the basic idea behind buying a term insurance. Because when you die then no insurance company will come to your doorstep and settle the claim. This is an online term insurance; no agent will try to help your nominee.

Hence, once you buy an online term insurance, the first job you have to do is to share this with your spouse or nominee.

2) Safe keep the policy document-

You have to safe keep the policy document. Also, share the same with your spouse or nominee. You must keep the document in such a way that in your absence it must be accessible to your nominees or financial dependents. Otherwise, even though they know that you have a term insurance, but struggle to get the claim due to loss of the policy document.

3) Mark the calendar for the next premium payment-

This one more aspect of to do things. Buying an online term plan is important. At the same time, continuing the existing insurance is most important. Hence, either opt for auto debit option or mark your calendar for paying it within due date. Please remember that sending a premium notice or intimation is purely a choice left with an insurance company. Hence, you can’t blame the same for not paying your premium dues. The entire onus of premium payment left with you, but not with an insurance company.

There are two risks if you forget to pay the premium within the due date and the policy lapsed.

  • In most cases, you have to undergo the medical examination once again. During this test, if they found any health issues they may load the premium or reject to revive it (considering the risk of health).
  • You have to bear the cost of this medical examination.

Hence, never miss the premium date and pay it within a due date to continue the benefit.

4) Review your insurance need regularly-

I know many buy the term insurance of around Rs.1 Cr to Rs.5 Cr. They feel great and secured presently. In addition, many of them have a wrong belief that this much cover will be enough for them. However, as of now the current insurance coverage may be good. But you have to review it at least once in a 5 yr. Because income, inflation, financial goals, financial dependents may increase. Hence, you have to review it regularly and based on that buy additional life cover.

5) Educate your dependents about how to use claim amount-

Buying term insurance is important, but at the same time, educating your financial dependents about proper utilization of claim amount is equally important. Because you will not be here to plan and invest for this amount. If your dependents not able to handle such huge cash, then an agent or banker may lure your dependents to invest all money in worst product. In worst, the same insurance company may sell an endowment or ULIP plan to your nominee. This in return may devastate your dependent financial life forever.

Hence, educate them about the importance of goal-based investing, product selection, doing homework before buying, or about personal finance.

51 Comments

  1. Thanks for Sharing. Very Informative. Keep Writing.

    Reply
  2. Thanks Mr Basavaraj. This blog is very much useful . I have one query regarding the medical reports for term insurance . Recently I went for medicals and my policy is still under processing. Is it mandatory for insurance company to share the reports to me or not ?

    Reply
    • Dear Pradeep,
      You no need to worry as in all cases they share the medical report with insured.

      Reply
  3. Thanks Mr Basavaraj for such useful blogs. I am having term plan for 1 Cr. since 2016, My agent mentioned me as non smoker which was wrong at policy time. My medical was clear and i am paying premium on due time.it will effect on claim in future ???

    Reply
    • Dear Kaps,
      It will impact the claim if you are still smoking or planning to continue smoking.

      Reply
  4. Sir ,what is your opinion about PNB Metlife term plan ? I know all companies are same to you but please tell me shall I buy policy from PNB Metlife. while buying policy claim settlement ratio is main thing or not??

    Reply
    • Vinay-You can go ahead if premium and feature affordable for you. Claim settlement is not the MAIN ratio but a small indicator.

      Reply
  5. Dear sir,
    I purchase a term plan from Pnb met life of rs 50 lakh ,medical will happens,policy issued,now in future if my life style will be changed or any other medical issue happens then it is compulsory to intimate the company

    Reply
    • Deepak-Please clarify the same regarding definitions of LIFE STYLE and MEDICAL ISSUE clearly with the insurer.

      Reply
  6. Hi Basavaraj,

    Thanks for your articles . I have got lots of information from your articles. My query is regarding LIC online term plan.

    As you mentioned that one needs to review his Term plan after every 5 years.

    I am planning to take LIC online term plan for 1 CR. After some years lets say i want to get it increased. So can this be done with current LIC online term plan by paying more premium or Do i need to buy another term plan ?

    Reply
  7. Thanks for reply

    1. what will happen when company closed due to any reason then who take guarantee to pay claim.

    Reply
  8. 1. I want to buy policy and confuse to choose company, best from my end is LIC, SBI, and ICIC. suggest me which one is better.
    2. SBI is private or semi government like LIC.
    3. What is role of IRDA when company will not pay claim after death.
    4. is any surety to get claim to nominee after death of policy holder.
    5. after death of policy holder company can make any excuse lik, wrong information given by policy holder in declaration form then what will be happen.

    Reply
    • Nandal-1) All are equally good and bad. You can go ahead with anyone which comforts you.
      2) SBI as per IRDA is private. But there is no such difference between private or public sector.
      3) Role is like the regulator and ombudsman-like RBI to bank.
      4) They can’t do so randomly to reject the claim.

      Reply
  9. sir,
    i regularly read your post. recently i was about to purchase term insurance plan of 1Cr from HDFC i click. however in there terms and conditions it was written that accidental death which occurs after six months from the date of accident will not be covered and lot of many more conditions such as adventourous sports death etc…
    is there any company who provides term insuarnce irrespective of types of death. thank you

    Reply
    • Nirmal-Adventures activities clause always there in all insurance products. If you are participating in such activity, then it is best to inform the insurer in early. Regarding accidental deaths, there is no such clause of 6 months waiting. May I know where you got this information?

      Reply
      • sir,
        sorry for late reply
        i have gpt the asked information from the brochure of the said HDFC term insurance. it was mentioned under the accidental death claim clause.

        Reply
  10. Thanks a lot!

    Valuable info. Life won’t be more risk if we follow these steps properly. Be happy!

    This sharing info is a Great service to everyone.

    Salute to everyone who participated.

    Reply
  11. Hello sir,
    How is lic new plan Jeevan lakshya???

    And pls suggest any gud pension plan. My husband age is 30 and I m 29 yr want to secure our future goals.

    And pls suggest any 2 gud Mutual fund sip for gud returns.

    Thanks

    Reply
  12. DEAR SIR

    I AM 34 YEARS OLD AND I WANT TO BUY LIC E TERM POLICY FOR 50 LAC FOR 35 YEARS. MY QUESTION IS THAT BEFORE 11 YEARS I HAVE MET WITH SOME MEDICAL PROBLEM (CHEST INFECTION) AND GOT TREATMENT OF T.B.(TUBERCULOSIS) ON THE PRESCRIPTION OF MY DOCTOR BUT NOW AM HEALTHY AND NO HEALTH ISSUES, SO IS MY MEDICAL HISTORY AFFECT MY PREMIUM AMOUNT.

    2. MY FATHER HAS HEART PROBLEM AND TAKING REGULAR TREATMENT FOR THE SAME. IS THERE ANY PROBLEM OF FAMILY MEDICAL HISTORY TO BUY TERM INSURANCE.

    PLS GIVE UR VALUABLE ADVICE

    Reply
    • Varinder-In my view if you don’t have any such issues since long, then it will not affect. You mention health status of your parents. Let them decide. Hiding may be dangerous.

      Reply
  13. Dear Sir,
    First of all congratulations for your excellent work.Keep going.I have a query regarding term plan. What if a person buys pure term plan and assigning his wife as nominee & Suddenly the policy holder along with his wife(Who is the nominee) met with an accident and unfortunately both passes away.Now, will the insurance company pay the benefits to their children?In this case is there any provision for assigning a secondary nominee something like that.Please throw some light on this issue.

    Reply
    • Vignesh-In case of death of policyholder and nominee, the death claim will be payable to his legal heir. Secondary nominee option not available in Life Insurance.

      Reply
  14. Hi Guys,

    Thanks Basavraj for making people aware about hidden aspects of the financial planning.

    I am an insurance professional and serving the insurance industry for the last 27 years. Presently, I am developing a portal called takeapolicy.com for online sale of insurance products.

    Since I am certified Insurance Broker, I am therefore following the simple concept for online sale of insurance products

    1. Provide as much knowledge as possible to the customer before he takes a policy.

    2. Keep complete transparency

    3. Follow the law

    4. Adhere to underwriting guidelines of insurance companies.

    5. Keep safe the policies customer buys through takeapolicy.com

    6. Being a Insurance broker, it is my duty to provide all the assistance to the customer/family/spouse/nominee in the event of a claim.

    I would like to have inputs from all the guys here so that the same may be incorporated in takeapolicy.com

    Your suggestions will be of immense use.

    Rgds

    Rajesh

    Reply
    • Rajesh-1) Make sure that too much knowledge or feeding may not confuse the buyers. What all requires including me is simplicity.
      2) Transparency in the sense your own income by each policy selling?
      3) While selling, you have to follow the law.
      4) Without following the underwriter, you will not get the policy. So what is great in that? Why you want to bring this feature into your business when you are actually a middlemen.
      5) I think dematerialisation is the best way you can teach customer.
      6) That all individual agents must follow.

      Reply
  15. I appreciate your work in educating people. Truly commendable job !

    Reply
  16. Fantastic post. Just now i came to know about your blog and it is awesome.

    Reply
    • Ashok-Pleasure to know and hope you enjoy reading and share with others.

      Reply
  17. This post is great, worth knowing and sharing.

    Thanks,
    Saravana

    Reply
  18. Please help me Sir
    I can go for online term plan or Offline term plan .
    Onloine term Plan ceep beter then offline But What is claim settelment retio online policy I can confuse
    Please help me you can give me best sulotion. Online beter or Offline for my better life risk cover .
    Please send me details aboute it

    Reply
    • Sachin-For insurance companies, they not differentiate between online or offline. Hence, chose the one which you feel comfortable. I prefer online (because of cost and you know what you are doing).

      Reply
  19. Hi Guys

    Wanted to know about SBI e-shield

    In buying SBI online insurance- there is no need of medical tests? Please advice.

    regards
    rohit

    Reply
    • Rohit-It is good and you can go ahead. Regarding medical tests, it is purely a call of insurer.

      Reply
  20. What if someone has taken an e-insurance and at the same time they opened the eInsurance DEMAT account in NSDL so there was no hard copy of physical policy being sent.

    Reply
    • Prakash-Good question. In that case, you have to provide the details of Demat Account with your spouse or nominee. The advantage is, you are free from the headache of safe keeping.

      Reply
  21. Cool !!

    Thanks for sharing tips, Basavaraj

    Reply
  22. Very useful information. Thank you sir. I have an online term insurance worth 60 lakhs. Now i wish to have a total cover of 1 crore.
    Plz suggest me whether to go for a single policy for 1 crore duly stopping the previous one or take another policy for balance 40 lakh.
    Further, if i have to go for 2nd policy is it better to go with same company or to go for another company.

    Reply
    • Srinivas-Go for another Rs.40 lakh term insurance and I feel comfort to go with an existing insurer.

      Reply
  23. Good article, I believe informing your nominees/dependents of all your bank details/investment/any insurance is more important than anything else, at least advice of minimum financial knowledge is a must.

    For example,
    1) Create an excel with list of bank accounts and bank names, share that excel with them.
    2) Make a single file of all insurance certificates and keep it in safe place. Do not forget to inform to your dependents/nominee about these certificates.

    When you’re no more at least they shouldn’t get double pain

    Regards,
    Kirthan

    Reply
  24. Very helpful article. Thanks a lot.

    Reply
  25. This article is worth sharing … Truly informative article … Never give a thought about reviewing insurance amount …

    Reply
  26. My parents and my wife and children all are dependent on me I want term insurance which fulfil their need. My monthly income is 50000

    Reply

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