Medical Test for Term Insurance

A term plan medical test is a health evaluation done to determine a person's risk profile before the policy is issued. It is crucial in assisting insurers in selecting reasonable prices and reducing the likelihood of future disputes. In practical terms, a term plan medical test clarifies the process and ensures that the coverage is dependable when needed.

What is Term Insurance?

A term insurance plan provides financial protection against uncertain events in life, such as critical illnesses, the death of loved ones, or even loss of income. The plan provides coverage against such events for a fixed number of years. Let us say someone takes a cover of Rs. 50 Lakh for a period of 20 years. They will have to pay a fixed premium every month. In the unfortunate event of them getting a critical illness or their untimely death within the 20-year period, their family members will get the sum assured of Rs. 50 Lakh.

The Need for Medical Tests Before a Life Insurance Policy

There is a list of requirements that one must fulfil before buying a term insurance policy. The standard requirements include filling up an application form and providing documents for proof of income, residence and identity. Additionally, applicants need to take a medical test. Here are some reasons why medical tests are essential when buying a term plan.

Helps Insurers in Deciding Premiums

The premiums payable on term insurance depend on the risk perception of the insurer. If the insurer thinks someone is at a high risk of an untimely death or a critical illness due to their health condition, they will charge a higher premium for this client.
 

However, not all applicants are at high risk. Medical tests help insurance companies determine the risk profile of each applicant. For healthy applicants, this can result in lower premiums. Only high-risk applicants have to pay a higher premium.

Lower the Probability of Claim Rejection

Not disclosing your medical history is one of the top reasons why your claim could be rejected. For example, when you buy term insurance, insurers decide to provide life cover based on their assessment of the applicant's medical history. You can check our term life insurance buying guide for more details.
 

As mentioned earlier, the premium is based on the health status of the buyer of term insurance. Performing medical tests at the time of buying term insurance helps the insurer get an accurate picture of the policyholder's health. Thus, medical tests reduce the probability of claim rejection.

Mandatory for Higher Sum Assured

Some insurers provide term life insurance without a medical exam. However, these are low-value plans of less than Rs. 5 Lakh as the insurers provide cover for unknown risks. For higher sums assured, it is compulsory to undergo medical tests.
 

From the applicant’s point of view, medical tests help them get a higher insurance cover. A term cover is meant to cover major unforeseen events such as critical illnesses, loss of income, and the untimely death of a family member. Such events involve substantial financial costs, and low-value plans are not sufficient to deal with such challenges.

Types of Medical Tests for Term Insurance

The types of medical tests required by insurers vary according to the policyholder's age and the risk cover. Here are the different types of medical tests required by the amount and the age of the insurance buyer.
 

Complete Health Check

This category includes tests such as ECG, blood pressure, fasting blood sugar, and blood count. In some instances, the complete medical report may also include kidney and liver function tests. This is a basic health check applicable for policies of small amounts.
 

Complete Health Check and Other Tests

Depending on the age of the applicant and the policy amount, insurers may ask for additional tests along with the basic health check. The additional tests may include the following.
 

HIV test

• Blood serum test (for liver health)

• Blood tests for cholesterol levels

• Urine analysis (for a range of conditions, such as kidney disorders, diabetes, etc.)

• Comprehensive Trail-making test (to check the functioning of the brain)
   

The combination of tests may vary by insurer. Typically, higher policy amounts would require a higher number of medical tests. Another factor determining the number and type of medical tests is the applicant’s family history of illnesses. Those with a history of illnesses may have to undergo more tests.

Benefits of term insurance medical test

A medical test for term insurance goes beyond a routine requirement. By improving precision, clarity, and long-term reliability, it strengthens the policy. Its significance is explained by the following points:
 

• Accurate premium pricing
  Medical reports provide insurers with a clear, evidence-based picture of an individual's health status. This enables premiums to be in line with the level of risk that has been evaluated rather than with generalised assumptions.  

• Reduced risk of claim rejection
  Disagreements during claims are less likely when medical information is accurately recorded at the time of policy issuance. This ensures recipients have a more seamless process during a crucial period.

• Transparency in policy terms
  The insured and the insurer have a clear understanding due to a validated medical record. It helps ensure that the policy terms remain clearly defined, with less likelihood of unexpected conditions arising at a later stage.

• Early detection of health issues
  Underlying issues that are not immediately apparent may be revealed by medical testing. Identifying such health conditions early on enables individuals to act toward better health management.

• Faster underwriting decisions
  With medical information readily available, insurers can complete the evaluation process more efficiently. This reduces delays and supports quicker issuance of the policy.

• Better coverage suitability
  Medical insights help insurers match the policy coverage with the individual’s actual risk level. As a result, the policy is not only approved but also aligned with practical needs.

Term Insurance Policies without Medical Tests

There are very few policies that fall under this category (risk cover of not more than Rs. 5. Lakh. Even with the low-risk cover, this feature is applicable only for younger applicants of less than 40 years of age.
 

Some insurers have relaxed their policies for medical tests during COVID-19 lockdowns. A doctor from the insurer's side may call an applicant to understand their health conditions. Subsequently, they may provide a term cover based on the teleconsultation.

Medical tests are a crucial factor to consider when buying term insurance. Interestingly, you do not have to worry about visiting a diagnostics facility to perform a medical test. When you buy term life insurance online, the insurer sends a representative to your doorstep to collect your blood samples. The insurer team will carry out all the required procedures without having to step out of your home.
 

Tata AIA provides term insurance plans that offer protection up to the age of 100. These plans come with different benefits such as the flexibility to choose premium payment terms, getting premiums paid back at the end of the policy term, and other benefits.
 

Get in touch with us to buy Tata AIA Life Insurance Term Plan online.