Term Insurance Archives -

Don’t let Your Term Insurance Policy Lapse

Tue, 06 Sep 2022 04:00:42 +0000

The Buyt Desk

A Term Insurance policy provides financial security for dependents of the insured. So always pay the premiums on time and do not let the policy lapse.

Life insurance products help you achieve your financial plans by providing financial security. Term insurance policy is the simple one of the many available products. A term insurance plan is purchased to provide financial security to the dependents of the insured in case of the death of the insured. This is the simplest and easiest way for providing your dependents financial security in your absence. It is a must to buy this policy if you are the sole bread earner of the family. And if you have loans in your name and other liabilities, then you have to cautiously take care that your dependents will not be affected because of these liabilities post your demise.

Term Insurance Policy Premium

You can choose the premiums to be monthly, quarterly, half-yearly or yearly. Opt for the one which is very affordable for you and you don’t miss the payment of premium. On-time payment matters as delay may lapse the policy. When the policy lapses, the insured will no longer be covered under the policy. The policy ceases and the whole purpose of buying the insurance is defeated. When you do not renew your lapsed policy or repeatedly fail to pay your premium, the policy will be terminated and all the premiums paid are wasted without any benefits. For the policy to be active and provide coverage to the insured, you need to pay all premiums on time or at least within the grace period. The grace period is usually 15-30 days and the policy benefits are valid during the grace period.

Why should you not lapse the policy?

Lapsed insurance will not cover you
When you buy a new policy because of a lapsed old policy, the premiums of the new policy will increase because of your age. So better not to lapse the policy.
As your age, medical conditions also change and if any medical issue has risen, the new policy premiums are going to cost more. So do not lapse the policy if you have a health condition.

How to keep track of the premium due date so that policy does not lapse?

Set up the automatic payment – Even when you have funds you may forget to pay the premium. The insurance company will send an automated reminder message but it is still better to keep another reminder. If you are sure that your bank account will have funds, then set an auto debit for premiums before the due date. Give standing instructions to your bank to auto-debit the premium amount to the insurance company on the due date of the policy premium. You can do this anytime during the policy period. Few banks give this option to their customers on their digital/online apps. You can opt for automatic payment through a credit card.
Keep your contact details updated – Always remember to update your contact details especially when you change your phone number, address or e-mail ID. The insurance company will contact you only through these details. You may be unreachable if you do not update the details. You will receive the premium reminders on the registered phone number, address and email ID in form of SMS, letter and email respectively. With these reminders, you may not miss the due date.
Adjust the premium payment frequency – You can change the premium payment frequency. If you feel paying a large sum annually is a little difficult then you can opt for monthly premiums so that your burden is divided and will not feel pressured at the end of the year. Paying a small amount every month could be easier than paying a lump sum annually.
Prioritize your expenses – When you find it difficult to pay premiums because of a lack of funds, you need to relook into your expenses. Prioritize the things that you should spend on first. And your insurance policy should be the top priority as it covers you and your family.

How to revive lapsed policy?

When you cannot arrange money to pay the premiums or skip paying as you do not remember, your policy will lapse. You will still have an opportunity to revive your lapsed policy. From the last missed premium due date, you will have 2 years to reinitiate it. You need to pay the outstanding amount (sum total of unpaid premiums) along with the delayed interest. If there is a huge gap, then you may have to undergo medical tests to certify your good health and the risk will be reassessed. Only the insurance company has a say in reviving the lapsed policy.

Summing up

A term life insurance plan is a must for every earning individual to financially protect the dependents in case of the untimely death of the insured. Insurance is a risk mitigation tool but you need to pay the premiums on time. Financial discipline can save you from lapsing your insurance policy. To enjoy the benefits of the policy and for cover to be available you need to make sure to not miss the premium and avoid the policy from getting lapsed.

The post Don’t let Your Term Insurance Policy Lapse appeared first on .

Term Insurance or Home Loan Insurance – What to buy?

Fri, 06 May 2022 06:54:17 +0000

The Buyt Desk

Owning a house is an aspiration for many. It’s a big dram with a big budget. You need a huge amount to purchase a house and thus home loans make this dream achievable. People take a home loan for a tenure of 15-20 years and repay back the loans through equated monthly instalments (EMI). But what if the loan borrower is not able to repay the loan or meets with an unfortunate incident of death or accident? It can cause severe financial stress to the family. That’s why it is important to have a protection plan for your loan. You could either buy a separate home loan insurance or have a large enough life insurance cover that could serve as a risk cover for your loan.

What are Home Loan Insurance and its benefits?

A home loan insurance plan provides the borrower coverage for the risk of loan repayment during the tenure of the loan. In case the borrower (insured) loses his /her job or becomes disabled due to an accident or sudden death, the home loan is repaid by the insurer. This act will help both the lender and borrower along with the dependents of the borrower. When the lender offers the home loan insurance, it will be a single premium plan and it will be added to the home loan and hence the EMI increases. Sometimes you may even have to pay a separate premium during the loan approval process.

By buying an insurance plan, the house owner will save the surviving family members from the responsibility of repaying the loans if the borrower dies during the loan tenure. Also, the lender will be saved from bad debts as the insurance company will pay off the loan for the borrower. Opting for a mortgage loan works in favour of the borrower as the lender feels safe to approve the loan as the chances of loan default are zero.

Home loan insurance vs. Term insurance

Cost/Premium

The premiums of home loan insurance plans are considerably higher compared to term insurance. The home loan protection plan requires fees to be paid upfront while it is distributed over the tenure in term insurance. Usually, the home loan protection plan premium is part of home loan EMI if you buy it with a lender.

Tax Benefits

Whether it is the premium of a term insurance plan or a home protection plan both can give a tax deduction under section 80C of the Income Tax Act 1961.

Cover

Home loan insurance only covers outstanding loan amount unlike term insurance which covers all liabilities of the insured including dependents and home loans.

Coverage period

The house loan protection plan covers the insured only till the home loan is completely repaid and also the coverage keeps on decreasing as and when repayment is done. While the term insurance provides coverage till the insurance term ends irrespective of the home loan and the coverage remains the same till the end.

Flexibility

When you refinance or alter the term of the home loan, the home loan insurance’s tenure cannot be changed. Also, it cannot be transferred when you change lenders. It is fixed insurance which cannot be changed as per needs and covers only home loans to be repaid. But the term insurance plans are flexible, you can anytime extend the sum assured to cover your extended home loan and covers all insured’s liabilities and debts including the home loan.

Rider Plans

Term insurance can be enhanced with add-ons for more coverage. There are rider plans to cover critical illness, accidental deaths, disabilities, unemployment and many more. Home loan insurance also has a few riders which cover terminal illness, accidental death, EMI waiver in case of job loss of up to three to six months and disability. But the cost of rider plans in home loan insurance plans is very high compared to the same in term insurance.

Summing up

The sum assured remains constant for a term life insurance and the same is paid to the nominee in case of death of the insured. In the home loan protection plan, the sum assured keeps decreasing and is equivalent to the outstanding loan. If buying insurance exclusively for a home loan then a home loan protection plan is more affordable because of decreasing sum assured. But if you already have sufficient term insurance coverage that is enough to cover your home loan too, you need not buy another insurance to cover your home loan. Always remember that your term insurance plans’ assured amount should be at least 10 times your current annual income.

When your term insurance is enough to cover only your current liabilities and debts, you will need new home loan insurance. As the insurance has tax benefits, it is safer to buy new insurance to safeguard your dependents against a major financial liability. Consider all the above points and make a wise decision about buying new insurance as per your financial conditions and requirements. Don’t buy a plan just because your lender asked you to when you have adequate term insurance coverage.

The post Term Insurance or Home Loan Insurance – What to buy? appeared first on .

When Can an Insurance Company Reject Your Claim?

Mon, 06 Dec 2021 06:43:37 +0000

The Buyt Desk

An insurance is a protection cover for unexpected circumstances. A life insurance is brought to secure the family financially if there is a sudden demise of the income earner of the family. To meet unexpected health expenses there is health insurance which helps you be prepared for a health emergency. The aim of both the insurance is to help you and your family during difficult times. But if you overlook or do not furnish correct information chances are that you may lose the claim benefit. An insurance plan is subject to the insured person’s age, lifestyle habits, medical history, occupation and income. Below are the things to be taken care of so that your claim is not rejected.

Grounds of Rejection For Health Claims

Disclose all existing Insurance Policies – Most of the people buy more than one insurance policies. And it is necessary to declare all the existing policies brought by a person to the new company in the application form. Few do it purposefully thinking they are fooling the insurer and few do not pay much attention to it and miss furnishing the details. But insurance companies are very particular about the policy related rules and regulations and it is absolutely necessary to declare your prior insurance policies.
Never lie or withhold any information – It is a very common ground which is used by companies to reject a claim. That is why it is very important that you do not hide any previous or hereditary illness, any risky hobbies, or current health conditions. Disclose everything about your health condition clearly.
Never give incorrect information – It is the duty of the person buying insurance to reveal all the necessary information to the insurance company. If there is no transparency then the application or claim is sure to be rejected. Always give real information when asked for regarding age, weight, income, occupation, height and any other details.
Always take medical tests when asked for – Policy approval is based on the risk assessment by the underwriter, who accesses the information provided in the application form. Higher the sum assured, more are the medical tests to be undergone. If these tests are not taken then a claim rejection would happen.
Chronic illness – If the person has developed chronic illness at the time of application, the chances of application rejection is more. Anxiety or depression, Asthma, Cancer, Diabetes, Heart disease, High blood pressure, High cholesterol, HIV and AIDS, Obesity, Parkinson’s disease are common health conditions that could cause a denial or higher premiums.
Always disclose medical history – Giving wrong medical history details in the application form and then getting caught after medical tests will attract rejection of the application form.
Hazardous Occupation – Insurance companies are unwilling to approve policies of people with jobs that have a higher degree of risk and danger like pilots, flight engineers, construction laborers, miners, electrical power-line installers and repairers.
Risky passion and hobbies – Insurance companies are reluctant to approve policies of people with hobbies that have a higher degree of risk and danger activities like mountaineering, scuba divers, base jumping, rock climbing and other adventure sports.
Income Limitations – Person applying should fit in the economic or income criteria of the insurance company. Applications of people with income below the necessary level will be denied.
Life Insurance applications rejected previously – If the application is rejected previously by some insurance company then probability of rejection by new insurance company is more.

Why Would Your Term Insurance Claim Get Rejected ?

Death of the breadwinner of the family will financially impact the family apart from emotionally. Term insurance plan is the safety net that a policyholder provides for the family. Claiming insurance on deposits of policyholders and receiving the insurance benefit in the form of a large fund will help the beneficiary to pay off any outstanding debts and support the family of the policyholder. All the effort of the policyholder will go in vain if the claim is rejected. Here are various reasons for rejection of term insurance claims –

False information – Hiding lifestyle habits at the time of buying life insurance like smoking and drinking or providing wrong information regarding age, weight, and inflated annual income may be reasons for claim rejection. With honest declarations in application form, the beneficiary may not have to deal with claim rejections.
Not paying premiums on time – If the premium is not paid on time, the insurance company considers the term insurance policy as lapsed. And one cannot claim the lapsed policy.
Incorrect nominee details – Insurance companies may deny a claim when there are no nominee details filled or updated in the application. If the nominee is dead too, then none can claim it.
Policy is still in contestability period – Insurance companies usually have one or two years as contestability period immediately after buying a policy. In this window, the insurance agency can investigate and possibly deny claims. If a policy holder dies within this period then chances of rejection of claim is high.
Cause of death – There are various types of deaths that are not covered under the insurance policy of the company. Death in hazardous activities or sports, death due to a pre-existing health condition, homicides, suicides, death due to natural disasters and terrorist attacks are usually not covered by term insurance policies.

Summing up

It is always better to be safe than sorry. All the premiums paid should not go in vain. Be honest and transparent while buying insurance. Be sure that you have disclosed all the important details to your agent so that you do not end up in huge trouble later. Be very cautious and alert while signing up for the term insurance and give out all details needed by the insurance company.

The post When Can an Insurance Company Reject Your Claim? appeared first on .

Why You Must Have A Term Insurance Plan?

Sat, 04 Dec 2021 07:51:33 +0000

The Buyt Desk

Term insurance is an agreement between the insurance company and the policyholder. It plays an important role in a financial plan. A term cover provides monetary protection to the policy holder’s family in case of an untimely death. If theer is only one breadwinner of the family it is really important that he/she has a term insurance plan.

What is Term Insurance?

Term life insurance is also called pure life insurance. It is a life insurance plan that will give financial coverage to the beneficiary/nominee on the death of the person insured. This will take care of the family’s financial needs if the policyholder is no more. The term insurance premium is usually very less i.e a few hundred per month for 1 crore coverage. The premiums are based on the insured’s age, health, and life expectancy and even a medical exam may be required in some cases. The insurance company may also consider the driving record, smoking status, current medications, hobbies, occupation, and family history to determine the premium. You can also claim tax benefit on the premium of the term insurance under Section 80C of the Income Tax Act,1961. A tax benefit of up to Rs 1.5 lakh can be availed on the premium payment.

Why Term Insurance?

Term Insurance provides a good life cover of sufficient amount with a very affordable premium cost. One can go for term life policies that last 10, 15, or 20 years. And once the term expires and the policyholder is alive, he/she can terminate the term life insurance policy or renew it for one more term or convert it to permanent coverage. These policies do not feature any savings component but are purely guaranteed death benefits and this is how it is different from whole life insurance products. Also few insurance companies allow converting term life into whole life insurance.

If the policyholder dies within the policy term, the insurance company will pay the policy’s face value to the policy beneficiaries. The cash benefit the beneficiary gets is usually not taxable. This amount can be used to settle the insured person’s healthcare and funeral costs, mortgage or consumer debt if any and help the family to take care of their expenses. In case the policy expires before the policyholder’s death, there is no payout in term insurance. But one can renew a term policy at its expiration, although the premiums will be recalculated for age and health conditions of the insured person at the time of renewal.

How much Term Insurance cover do one need?

Term insurance protects the family against unforeseen death of the breadwinner by not disturbing and covering the future lifestyle or goals of the family. The cover must not be based on the present income but on the future assessment of the goals that one has decided for their family. The coverage amount should be adequate to meet the dependents’ present day to day expenses and future needs including kid’s college fees, carrier and marriage, medical expenses, spouse’s old-age needs and pending liabilities and loans.

The general thumb rule of the term insurance market says a person should buy a cover which is 10 times the current annual income. For example, if one’s current is Rs 5 lakh per annum then the chosen amount of Term insurance Cover should be around Rs 50 lakh. These are rudimentary computations which do not take into consideration the liabilities of the insured person, his/her existing investments and the needs of the family. Truly speaking, the financial circumstances of every individual are unique and a one size fits all approach may not give a precise result. A thorough analysis of insured person’s expenses, investments, liabilities and requirements is required to arrive at the ideal cover amount. Also there are insurance plans that offer an option to increase the sum assured to an X% year on year. Such plans keep policyholders sufficiently insured considering the current inflation rate. There are methods that financial experts have given which help one to calculate how much life cover one needs. Few such methods are human life value, income replacement value, expense replacement method and underwriter’s thumb rule method.

Summing up

Securing your loved ones against unforeseen emergencies gives you incomparable peacefulness. You can employ a term life insurance plan to take care of your family’s financial needs when you are no more. To make the best use of this financial product, get acquainted with the terms and conditions and have complete clarity on its working. Go through all the options available in the market and choose the best product for your beneficiaries. You can go for the one which is offering you the maximum benefits at the lowest premiums and satisfying all your requisites.

The post Why You Must Have A Term Insurance Plan? appeared first on .

Covid-19 Vaccination is Must To Buy Term Insurance

Sat, 04 Sep 2021 06:31:11 +0000

The Buyt Desk

If you haven’t yet got COVID- 19 vaccination done then buying term insurance will be difficult. The big insurance players like Tata AIA and MAX Life have set a new protocol. They now need Covid-19 vaccination certificates from term life insurance buyers. It is anticipated that other insurance companies might follow the same suit in the coming time.

According to recent reports, Max Life is issuing new term life to individuals above the age of 45 years only if they provide their vaccination certificates. On the other hand, Tata AIA is issuing coverage to individuals who have taken their first shot irrespective of age.

A few other insurance companies are giving discounts to fully vaccinated individuals regardless of their age. Reliance General Insurance has announced a 5 % discount to buyers who have taken both jabs.

The new move of insurance companies can be considered a positive step to promote vaccination. If the final vaccination certificate is required, then an individual has to wait for 4-6 months after taking the first dose of covishield and 28 days after getting the covaxin jab.

How Can You Get Your Covid Vaccination Certificate?

The government of India is issuing covid vaccination certificate to every individual who has taken their vaccination. The certificate confirms the individual identity in addition to the vaccine confirmation. It contains the individual’s name, age, gender, vaccine name, name of person administered the vaccine, place and date of the doses.

If you have not received the vaccine certificate, you can download it from the COWIN app online. Here is the step by step guide for the same.

Step One: Visit the website of COWIN, https://www.cowin.gov.in/home

Step Two: Login to the website with your mobile number. The number you used to get registered on COWIN for vaccination.

Step Three: Soon after login, you would receive an OTP on the registered number. Enter the same and press the enter button.

Term Insurance Archives -

Don’t let Your Term Insurance Policy Lapse

Term Insurance Policy Premium

Why should you not lapse the policy?

How to keep track of the premium due date so that policy does not lapse?

How to revive lapsed policy?

Term Insurance or Home Loan Insurance – What to buy?

What are Home Loan Insurance and its benefits?

Home loan insurance vs. Term insurance

When Can an Insurance Company Reject Your Claim?

Grounds of Rejection For Health Claims

Why Would Your Term Insurance Claim Get Rejected ?

Summing up

Why You Must Have A Term Insurance Plan?

What is Term Insurance?

Why Term Insurance?

How much Term Insurance cover do one need?

Summing up

Covid-19 Vaccination is Must To Buy Term Insurance

How Can You Get Your Covid Vaccination Certificate?

If you have not received the vaccine certificate, you can download it from the COWIN app online. Here is the step by step guide for the same.

How to Get a COVID Vaccination Certificate Via WhatsApp?