Term insurance is a necessity in today’s fast-paced world where we compete almost every day to stay relevant and ready for the next opportunity. Also, the uncertain nature of life is a factor to consider for getting a term insurance.
Healthcare services are becoming more and more expensive, and getting quality treatment is even more difficult. With all this in mind, if someday an unfortunate incident occurs, you should be in a position to still support your family in your absence. That is exactly where a term insurance comes into the picture. Term insurance plans provide death benefits that support your family financially even after you.
In this article, we will focus on why you should not buy a term insurance plan without medical test. Alongside, we will also understand term insurance benefits.
Term Insurance without Medical Test
To avail of a term insurance policy, you will generally have to give a medical test. A medical test gives your insurer a clear idea of your health quotient, and your premium will depend on how clean a chit you get from your medical practitioner. If you have a family history of certain diseases or if you are suffering from any ailment at the time of policy issuance, your premium amount will rise. You could additionally opt for multiple riders like critical illness riders, personal accident riders, permanent disability riders, and so on. These insurance riders will take care of the parameters that are not included in your original policy.
Almost every term insurance provider will ask you to take a medical test before issuing you a policy. However, some will still not ask you to take a medical test. This also depends on your age and the sum assured. Some providers offer term insurance without medical tests in India if the maximum sum assured does not exceed INR 1 crore. Such term insurance providers usually take your medical history over a call and issue your policy, especially if you are a healthy person. Considering the amount of cover you need and your age, some providers forgo the test. This can help you save expenses on medical tests.
Multiple aggregator websites allow you to compare many different policies online. You can segregate the list based on which of them offer you term insurance without medical tests. It is important to read all the fine prints properly before choosing any policy provider, especially if you are going for a provider offering term insurance without a medical test.
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What is Whole Life Insurance?
A whole life insurance policy is also known as a permanent insurance policy. You will have to pay a higher premium as compared to the premium of a term insurance plan. The advantage here is that the premium amount is fixed. In addition, along with the death benefit, you also get income benefits, as the cash amount that is accumulated over time is exempted from taxes. This amount can be used at the discretion of the owner of the policy. You could use this amount for retirement planning or for paying the future premiums of your insurance. If you are in your late 30s or above 40, it is recommended that you go for whole life insurance, as you may have more responsibility towards your family, such as children’s education. You will need higher financial security. As the premium is quite high. Thus, it is important to think twice before choosing this insurance.
Buying a Term Insurance Plan without Medical Examination
Many insurance companies ask their potential customers to take a medical test before buying a term plan. A medical test will help the insurer decide the right premium for the coverage desired by the policy buyer based on your ailments or illnesses. Most insurers will ask you to take a medical test, but opting out of it might not be a choice given by every insurer.
If an insurer recommends you take a medical test before purchasing the policy, then the policy could have certain terms and conditions in case you decide to opt-out of the test. A lot of insurance companies might give a term plan without medical test if you are in your early 20s or 30s with zero lifestyle habits.
It is always advisable to check the terms and conditions carefully if you are going for term insurance without medical test.
Things to Consider When Purchasing a Term Plan without Taking a Medical Test
While purchasing a term life insurance plan without medical exam, make sure that you do not hide any health condition or a lifestyle habit from the insurer. This information remains confidential and will not be revealed to anyone.
The insurer can increase your premium due to your smoking habit or disease, but at least the death benefit claim will not be declined. The solution to higher premium rates is getting premium quotes from various companies and choosing the term plan from a reputed insurer offering affordable premiums.
Why Medical Test Is Important for Term Insurance?
Many insurance companies opt for a term insurance plan without medical test, before issuing you a policy, but is that the right approach? We recommend that you do not go for such policies. A medical test should be mandatory for everyone who is buying term insurance. The aim of term insurance is to provide your family with a financial blanket in case something unfortunate happens to you.
A medical test will reveal a few important ailments, deficiencies or other problems of which you might not be aware. It will also allow the insurer to include these factors before deciding on a premium for you. This will benefit your family in the long run as you will be covered for all of the factors. Disclose habits like smoking so that the insurer can take the right step while setting up your policy.
Let’s take a look at some reasons why the medical test is required for term insurance:
Premiums
The insurer’s main objective is to calculate the premium you must pay for your term plan. Based on how one perceives risk, the insurance industry operates. So, before determining how much of a premium you should pay, the insurance provider needs to be aware of your medical condition. Your insurance premium will be cheaper if you are physically healthy. However, the risk factor is bigger if you have pre-existing medical conditions, which will result in a higher premium.
Sum Assured
The sum assured is another feature of term insurance. The sum insured is the amount of money that is paid to your nominees in the event that an unexpected circumstance arises while the term plan is in effect. The medical examination required for term insurance enables the insurers to learn all there is to know about your health. If you are generally in good health, they may then be able to offer you a bigger sum assured. The lesser sum assured offered by term insurance without medical tests is typically insufficient to support your family financially.
Claim Rejection
If you believe that purchasing a term plan without a medical test will allow you to save money despite having an underlying condition, you are mistaken. If it is determined that the policyholder’s death was caused by a pre-existing ailment, the insurers would often deny the policy claim.
Read about other Reasons Why Term Insurance Claims Get Rejected
Low Coverage
A life insurance policy will inevitably offer less coverage if you purchase a term plan without a medical test. This is due to the fact that the insurer must make up for the risk associated with any medical conditions that you may have but have not yet disclosed to the firm.
You are aware by this point that a term plan without a medical exam will not be as beneficial to you as one that does. Although the procedure may seem a little tedious at first, it ultimately benefits you. Your objective is to leave your family with enough money to support their way of life after you. You can only succeed with that with the proper plan.
Disadvantages of opting out of a Medical Examination
Smaller Coverage Amount
If you opt for a term insurance plan without medical test, the chances are you will end up with a lesser cover. This might not be sufficient for your family’s well-being; in case something happens to you.
Higher Premium
If the insurer is not aware of your medical conditions/history, chances are they will charge you a higher premium to safeguard their risk. Your premium is decided on the risk perspective you come with while buying term insurance. If you do not disclose any medical history, you might have to pay a higher premium.
Possibility of Claim Rejection
If you do not disclose your medical history or lifestyle habits, and those ailments and habits cause an unfortunate event, the insurance company will straight away reject your family’s claim.
Term insurance policies have the sole objective of providing support to your family when you might not be around. If you compromise on giving even the smallest information related to your health, your family might not get a desired and deserving cover after your death. Therefore, a medical test should be mandatory while you are buying term insurance.
What Does a Medical Test for Term Insurance Consist of?
The nature of medical tests varies from case to case. It largely depends on the declarations made by the applicant and can consist of the following in addition to other tests depending on your lifestyle habits, current illnesses, and medical history.
- Height and weight for determining the BMI (Body Mass Index).
- A blood or urine test covering various profiles, like CBC (Complete Blood Count), glucose etc.
The medical history of the applicant and the family would be examined and evaluated to determine what needed to be covered. The tests may also check for HIV types I and II and lipid levels. If the person or a family member has a history of sickness, extra tests might be necessary. When taking these tests, it is crucial, to be honest about our drinking and smoking habits. People are also questioned about their travel history.
When is a term insurance medical test mandatory?
It’s critical to understand whether you must pass a medical exam in order to obtain a specific term plan. The following situations necessitate a medical exam in order to purchase a term insurance plan, despite the fact that some term insurance plans are available without one.
A medical test is normally mandatory in either or both cases.
- If you are older than 35 years.
- If you pick a sum assured of INR 10 lakhs or more.
There may be some term insurance plans without medical tests. However, pre-existing illnesses, family history, and hereditary conditions would require a medical test irrespective of the age or amount of sum assured.
Stages of insurance medical test
The majority of insurers might want you to take a life insurance medical exam. This enables the insurer to confirm the accuracy of the information regarding your present health and previous medical history. A licenced and certified practitioner does the medical examination.
The insurance medical test is often conducted at a diagnostic facility designated by the insurer. A qualified medical professional will collect samples, perform various tests, and ask you certain questions based on a questionnaire. Generally, the entire process is completed within half an hour. Here are three phases of medical checkups for insurance.
1. Verbal questions
The evaluating medical professional will provide you with a questionnaire. You must reply to these verbally according to the best of your knowledge with sheer accuracy.
During this stage, the medical practitioner will ask you certain questions. These may include questions about past hospitalizations, if there are any medicines you consume on a regular basis, history of any medical procedures you may have undergone, and any current medical issues and diseases.
The medical professional may also ask you questions about the medical history of your close family members. Additionally, you may need to provide details about your family doctor and the facility you often use in case of illness.
You will also have to give information about your habits, such as smoking, drinking, or drug abuse, if any. In case you suffer from anxiety, depression, or other mental issues, you must provide details about the same to the medical practitioner during this phase.
2. Standard sampling
In this phase, standard samples, such as blood and urine, may be collected for testing. The samples are checked for various diseases. The results of such tests are then cross-checked with the information provided during the verbal questionnaire stage.
3. Medical tests
Based on your age and the sum assured applied for; some additional medical tests may be conducted. The test results will be combined along with the other information collected to determine your eligibility for procuring life insurance coverage.
A full medical report includes fasting blood sugar levels, echocardiogram (ECG), blood pressure level, and complete blood count.
The primary objective of undergoing a medical checkup for term insurance is to determine your health quotient. Depending on the results of the medical examination, the insurer will offer you a customized plan that is suitable for your personal requirements. Moreover, when you are able to provide a medical fitness certificate, you may be able to reduce the premium cost, which results in significant savings over the years.
It is advised that you first undergo the necessary exams to ascertain your eligibility before choosing the finest life insurance policy.
What are the benefits of having medical tests for term insurance done?
In the event of your untimely demise, having a term insurance plan can help you provide your family with financial security. Your children’s future, loan repayment, and household bill management will all be taken care of while you are away, thanks to the term insurance benefit.
However, a thorough term insurance medical exam is required as part of the term insurance buying procedure. Your overall health status and risk profile will be determined by the insurance provider based on the results of the term plan medical tests.
The insurer will then provide personalised term insurance policy quotes for you so that you may select the term plan option that provides the greatest advantages for the least expensive premium rates.
Benefits of Term Insurance with Medical
Reduced possibility of claim rejection
Any discrepancies in personal details at the time of buying the policy and while making a claim can result in the claim getting rejected. Medical tests serve as documentary evidence of the details submitted earlier and can thus support your claim.
Reality check
The test reports give you insights into your medical conditions. This aids in taking preventive and remedial measures for leading a healthy life.
Reasonable premium rates
Having a healthy body is rewarded by lower premium rates. You can thus enjoy modest savings through lower premium fees.
Higher sum assured
Term insurance plans requiring medical check-ups normally offer a higher sum assured depending on the test results. This allows you to create a larger corpus for your family during unfortunate times.
How does your health affect your premium and coverage?
There exists a direct correlation between premiums and mortality risk. The higher the mortality risk, the higher the premium amount. Thus, your health conditions significantly affect the premium and coverage.
Having said that, a lower premium must not be the sole criteria for selecting a term plan. Besides, the premium amount and coverage vary for each insurer. So, you must also take into account the creditability of the insurance company.
FAQs
1. Can I buy term insurance without medical tests?
Yes, you can buy a term insurance plan without a medical test, but it comes with a set of repercussions discussed in this article.
2. What is a medical test in term insurance?
A medical test in a term insurance plan is conducted by the insurance company to gauge the health of the applicant. This test usually includes a blood test, urine test, ECG or EKG test, etc. In addition to this, the insurance company may also request some tests as per your unique health conditions.
3. Why is a medical test important for a term plan?
A medical test in a term plan allows the insurance provider to determine your risk. The more health issues a person has, the higher the chances of needing medical attention and filing claims. This increases the risk perception for the insurance company. On the other hand, a healthy applicant will likely make fewer claims, reducing the risk perception. A medical test allows insurance providers to understand the optimal amount of cover needed for each customer.
4. Does the insurance company staff conduct medical tests?
No, the insurance company staff does not conduct medical tests. The insurance company has a network of registered medical centres. You can visit any of these at your convenience.
5. Do all term plans require medical tests?
The policy term and conditions can differ from insurer to insurer. A thorough health check-up enables the insurer to take into account the risk of unknown associated medical conditions and offer you suitable coverage. But all term plans do not require a medical test. However, such plans usually charge higher premiums and offer lower coverage.
