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?
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.
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.
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Thanks for Sharing. Very Informative. Keep Writing.
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 ?
Dear Pradeep,
You no need to worry as in all cases they share the medical report with insured.
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 ???
Dear Kaps,
It will impact the claim if you are still smoking or planning to continue smoking.
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??
Vinay-You can go ahead if premium and feature affordable for you. Claim settlement is not the MAIN ratio but a small indicator.
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
Deepak-Please clarify the same regarding definitions of LIFE STYLE and MEDICAL ISSUE clearly with the insurer.
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 ?
Shub-You have to buy the new one.
Thanks for reply
1. what will happen when company closed due to any reason then who take guarantee to pay claim.
Nandlal-Refer my post "What if your Insurance Company goes bankrupt?".
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.
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.
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
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?
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.
Nirmal-I am not sure. If they mentioned then either you have to accept it or find some other insurer.
sir.
any other insurance company if u can suggest. plz
Nirmal-Refer my post "Top 5 Best Online Term Insurance Plans in India-2016".
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.