FAQs 203 views November 23, 2018

Many people buy term insurance plans without realizing their effects and significance. This results in many people not reading the terms and conditions mentioned in the policy. The information contained in the policy proposal form not only describe how term insurance acts as a financial cover to the nominee(s) of the policyholder in the event of his or her untimely demise during the policy period but also the added rider benefits available on payment of extra premium amounts. In addition, the need to pay premiums regularly throughout the entire premium paying term in return for death benefits to be handed over to the dependents is a factor that many people tend to ignore or overlook, thus, resulting in rejection of many insurance claims.

The need to disclose all necessary facts and information is another factor that many overlooks. The concept of insurance is based on the principle of “Uberrima files”, which means that the insurance contract between the policyholder and the insurer is made in utmost good faith, the failure of which can result in claim rejection.

Premium rates tend to be constant throughout the entire term policy. However, some people prefer to opt for smaller policy terms to benefit from low premium rates believing that they can renew the same later. However, they tend to miss the fact that renewal of policies beget higher premium rates, thus, resulting in them paying more after the renewal of their term policies.