Life insurance policies always have long term significance. However, in today’s fast-paced world, it is not uncommon for people to think long and hard. Today, if more than half an hour elapses in the delivery of pizza, the company will pay you back. No one likes to wait twenty to thirty years to avail the benefits of an insurance policy in such circumstances. This is why the life insurance agent is told, “Show me if you have a policy that benefits you in the short run.”
Insurance agents found an easy way out a few years ago to meet their sales targets. They began to persuade customers to pay premiums for three years. He believed that his income would have increased in three years and once he started paying premiums, he would have got out of the habit. Now the same thing started to be presented differently: “Pay the premium for three years and if you do not like the policy, stop paying the premium. The risk cover will remain the same. “
After hearing such a presentation, a client named Vivek took the policy. When he bought a big house in three years, he decided to stop paying premium so that he could pay more EMI. He found out that the insurance company had not issued any such policy. He felt betrayed. Insurance companies call this Miss Selling. If you understand some of the important things about life insurance, you can avoid falling prey to Miss Selling.
We take out life insurance policy only when we are healthy. This insurance is always for long term so there is no point in taking out a policy for only three years. However, according to the current trend, some plans have a long-term policy of paying premium for a limited period of time.
The life insurance company has so far not been able to close the policy for less than three years. Now the limit has been raised to two years. You can now surrender the policy after two years in unavoidable circumstances. Surrendering a policy is a breach of contract with the insurance company. Hence companies charge fines against it. That is why surrendering a policy is always detrimental.
The Insurance Regulatory and Development Authority of India now gives a period of up to thirty days after taking the policy, in which the policyholder understands all the terms and conditions. If you do not like the policy after reading the terms and conditions, it can be returned. It causes minor damage. Everyone knows that there is a lot of such information related to life insurance so we will talk about this in other articles.
Q: I had an epilepsy two years ago. Recently my term insurance policy lapsed because I forgot to pay premium. Now the company is asking for a medical check-up to restart the policy. What effect will my illness have on the policy?
Answer: We have said earlier in this column that insurance companies offer policies only to healthy individuals. You got sick during the policy period, but now that the policy has lapsed, it is OK for the company to ask for a medical check up. The company will now notify you of a new premium based on your inquiry, which will be higher than before. If you are willing to pay a new premium, your risk cover will continue.