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10 Reasons You Must Read Your Life Insurance Policy Carefully
2-August-2021 |
We purchase a variety of insurance plans during our lives , whether it is a life insurance policy, health insurance or Insurance for automobile . We take these policies as we understand their importance for tackling emergencies, such as a sudden and unfortunate accident, death or a medical contingency. But what we miss out mostly is reading the insurance policy document, which has all the details with respect to benefits, conditions and terms of the policy.
What most of us don’t know is that reading the term insurance policy document is just as important as purchasing the right plan. Always read your policy document to conduct an insurance policy check and determine whether it is in line with your needs.
Why Should You Read the Insurance Policy Document?
Your insurance policy document is full of terms that have to be understood if you want to know your insurance policy properly. This is why it is important to carefully read your insurance policy papers:
- Policy name
There are plenty of life insurance plans available in the market. When you buy a life insurance plan from either the agent or directly from the company, you must go through and check the policy name mentioned in the insurance policy document.
This should be done to check and confirm whether the allotted plan is the actual one for which you paid the premium. This ensures that in case there is any mistake, it could be rectified immediately by contacting the insurance provider.
- Occurrence of the event for paying the benefit
The information under this heading talks about the events under which the benefits are paid to the nominee of the life insurance policy. It has details about the various events that could occur and the corresponding pay - death, disability etc.
Certain life insurance policies offer additional rider# benefits like the critical illness benefit. Under this rider#, the sum assured is paid to the insured once they are diagnosed with a terminal illness. If you carefully read through the policy document, you can read about the riders# to understand what they cover and how they can help improve the coverage of your life insurance policy.
- Nominee details
This section contains the details of the nominee – to whom the benefit is payable on the occurrence of any event mentioned in point 2. You need to check the correctness of the details of the nominee. Even the nominee should be made aware of this as he/she would be the person who would have to claim the benefits.
- Premium paying term
The premium paying term varies from policy to policy. For certain policies, you can choose between single premium payment, limited premium payment or regular pay. However, for some others, you may not have a choice. Knowing more about the premium payment term can help you plan your premium payments conveniently.
- Terms for the revival of lapsed policies
In case you are unable to pay the premium of your life insurance policy within the grace period after the expiry date, it leads to the policy getting lapsed. It is very important that you know how and when it is possible to revive the policy and how you can manage to retain the policy benefits even after missing the payments.
Insurance companies offer a 2-year-revival period to policyholders to revive their policy after a lapse. However, certain policies may limit the instances of revival during the course of the lapse. Hence, make it a point to read your offer document carefully to check how and when you can revive your policy.
- Exclusions
- In such cases, if the policy was issued after 1st January 2014, all the death benefits would be paid in full.
- For policies issued after 1st January 2014, the terms are different. Get in touch with your insurance provider to understand the suicide coverage details.
Insurance policies have their policy exclusions listed on the document so that one may know what is not covered under the policy. If the insured’s death occurs due to suicide,the policyholder’s family would not be able to file a claim for the death benefits.
These terms may also change due to the regulatory changes brought by insurance authorities in the country.
For example, in cases of death due to suicide, the following are the applicable terms:
If suicide is committed within 12 months of policy inception, there would be no liability on the insurance company to pay the claim.
For suicide committed after 12 months:
- In such cases, if the policy was issued after 1st January 2014, all the death benefits would be paid in full.
- The surrender value of the policy
Usually, all policies would have a certain surrender value. These are mentioned in the pre-closure conditions of the policy. If you go for a pre-closure or termination of a policy due to any reasons, you should know what the surrender value for these policies is. Knowing these terms helps in getting the surrender value by raising requests with the insurance company.
- Terms for availing loan against the policy
If you are surrendering the policy for monetary reasons, it is necessary to know that certain policies enable you to avail of a loan against the policy. These terms are mentioned in the “loan against policy” section in your insurance policy document. This section can be useful if you are in need of a loan for extra financial support.
- Rider# conditions
Life insurance policies offer additional riders or add-ons that help enhance your life insurance policy for extended coverage. However, these riders come at an extra premium, and so it is important to select only the ones that are most appropriate for your needs. Moreover, it is necessary to know under what circumstances the rider will be activated. For example, a critical illness rider comes into effect once the policyholder has been diagnosed with a critical illness and not before that.
- Other conditions
Apart from the ones mentioned above, a life insurance plan could also have additional conditions with respect to choosing a nominee, change of policy benefits, changes in any details given etc.
Frequently Asked Questions
- What is a life insurance review?
Life insurance plan review refers to rechecking your policy and taking into consideration the changes in your family’s lifestyle, income, etc. This way, you can ascertain if you need to make any changes to your life insurance policy to keep up with your family’s financial needs.
- How should I check my insurance policy?
You can do an insurance policy check by simply going online on your insurance provider’s website and checking your online insurance policy with the help of your policy ID. You can even keep an offline copy of your policy document by downloading your insurance papers on your desktop or on your phone.
- Why should you review your life insurance coverage?
Your family’s financial needs and requirements change with time. Any significant change in your family’s lifestyle, income and expenditure should be considered while reviewing your insurance coverage. The amount of insurance coverage that may have been adequate a couple of years ago may not suffice in the present scenario, in case some new financial requirements come up in the family. Hence you need to review your life insurance coverage to make necessary changes from time to time.
Conclusion
Always review your life insurance policy to ensure that it meets your requirements and make any necessary changes as needed.
If you are looking to protect your family by taking a life insurance policy, you can check out term insurance plans from Tata AIA Life Insurance.
A term plan is a life insurance plan that covers you for a predetermined sum assured for an agreed premium. This sum assured is paid to our nominee in the event of our untimely death during the term of the policy. Affordable term insurance plans can offer an extensive life cover with low-cost premiums.
You can browse through Tata AIA Life Insurance Plans and find the suitable plan for your needs. We ensure a transparent purchase and renewal process for your policies. You can download any policy details on our website and calculate your premium with our calculators.
For any queries, contact our experts today!
L&C/Advt/2021/Aug/1282
