Why is Medical Examination Important for Purchasing Term Insurance Policy
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A term insurance plan acts as a financial safety net for the policyholder's family and dependents in the face of an unfortunate event before the policy term's end. The insurance provider conducts the medical examination before providing the policy to determine life assured's health condition and consequently help offer the best term plan to them.
The medical examination depends on factors like the life assured’s age, family medical history and the type of insurance policy he/she plans on buying. The examination consists of weight and height determination for finding Body Mass Index (BMI) and basic tests like Complete Blood Count, Urine Test, Differential Count, Cholesterol, Fasting Plasma Glucose, HIV I and II. Read on to know the reason behind the importance of medical examination while buying a term life insurance policy.
When Is The Term Insurance Medical Examination Compulsory?
- Above The Age of 35 - The medical examinations are mandatory when the life assured is above the age of 35. However, some insurance policies do not require medical tests up to the age of 40 to 45 years.
- Your Sum Assured Is Rs. 10 Lakh and Above - The life assured must undergo the medical examination if the sum assured is Rs. 10 Lakhs and above. Although, there is some relaxation in the sum assured money as well. The medical tests can be exempted for a below 45-year-old life assured with the coverages up to Rs. 20 to 25 Lakhs.
On a side note, if the life assured has a pre-existing illness, hereditary conditions or a family history of health issues, he/she is subjected to a proper medical examination irrespective of their age or sum assured.
Why Is A Medical Examination Necessary?
As mentioned before, the insurance companies take a medical examination to help the customer by framing a personalized policy according to their needs, as no two families' health and financial requirements are the same. Following are some other points that highlight the necessity of having a medical examination while buying a term insurance policy.
1. Premiums
The amount of premium paid by the applicant for the term plan is calculated through risk perception by the insurer. Hence, conducting a medical examination becomes crucial to decide the appropriate amount of premium towards the plan. The premium will be lower if the applicant is physically healthy; however, if the applicant suffers from a pre-existing medical condition, the premium will be higher because of the high-risk factor involved.
2. Sum Assured
The sum assured is the amount a nominee receives if an unforeseen event occurs during the policyholder's term plan tenure. As the medical examination clarifies the applicant's health conditions beforehand, a healthy applicant can be offered a higher amount of sum assured. Thus, it is advisable to go with the term insurance with a medical test as plans without medical examinations offer low sum assured, which might not fulfil your family's future financial needs.
3. Claim Rejection
Some plans with low sum insurance are provided without a medical examination of the applicant. However, you should not be too confident in purchasing these plans if you have a pre-existing illness. If a policyholder dies, the beneficiaries might not claim their money as the company can argue that the client deliberately hid their health conditions to buy the policy. Thus, it is advised to go for a suitable plan with a proper medical checkup.
4. Coverage
A policy without a medical examination is expected to have a lower coverage as the insurer will compensate for the risk involved with the applicant's non-revelation of unknown medical conditions. Hence, it is advisable to go for a plan with medical examination over this.
Endnote
A term insurance policy with medical examination requirements provide multiple benefits like reasonable premium rates, higher sum assured and a reduced possibility of claim rejection along with a reality check on the applicant's health. It is advisable to prefer these plans over plans with no prior medical tests to make an informed financial decision.
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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
