It was already March 24 and I was yet to get myself a life insurance policy. There was just no time left and to avail the tax benefits, I applied for the insurance plan that could provide me with the papers at the earliest. But soon I realized what I had saved on taxes, went in paying the extra premium amount.
This is a common mistake many people make - they avail of an insurance policy without going for a medical test. Many insurance companies also lure customers by saying that medicals won't be required. But in the long run this proves to be harmful, as not only do the policyholders face problems during claims, they also end up shelling out heftier amounts of cash while paying the premiums.
Problems that can come up due to lack of medical details:
Claims being held back: If the policy holder dies within two years of buying the insurance, the company can refuse to pay the cover as it can claim that the policyholder had held back details about his health. This is a common issue and though in many cases the insurers are valid in making such claims, in some cases the policyholders suffer too. For instance, a person at the time of availing a plan may not be aware of his kidney problems but soon after buying the policy his condition may deteriorate, leading to his death. The insurance company may not be willing to pay the cover even then.
Higher premiums: When a company sells you a life insurance policy without sending you for a medical test, it makes you pay a uniform premium. And your friend who is much less fit than you also pays the same. This is unintelligent, as usually a fit person has to pay a lesser premium. So you end up paying Rs 12000 where you actually needed to pay only Rs 9000!
Benefits of a prior medical test:
Easier settlement of claims: Once the tests are done, the ball rolls back to the insurer's court. The insurer is now aware of your health issues and in the case of death, cannot refuse to pay the cover. In a recent case in Mumbai, a court ordered an insurer, which had held back a cover, to immediately pay up as the medical tests were done and according to the conditions, the insurer was aware of the policyholder's health problems.
In other words, since the insurer gets the tests done before selling the policy and charges the premium accordingly, it cannot hold back the claims in case of a death.
Lesser premium and more cover: Most policies that don't require a medical test provide you with very little cover. Even if you are fit and young, you get minimum cover. Apart from this, you also end up paying a higher premium. On the other hand, policies with medical tests give you a much higher cover and you also pay just as much is needed.
Declaration is mandatory. Even if you find a policy that you can buy without undergoing a medical test, you will have to declare your health issues in the form. And if you make incorrect declarations, the repercussions can hit you hard. So be wise and go for a medical test before buying a life insurance policy. It is simple and hassle free and beneficial in every way.
Written By: Deepak Yohannan
The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal
For more articles by Deepak Yohannan, please visit MyInsuranceClub.com
You may write to the author at Deepak@myinsuranceclub.com