Should you opt for term insurance without a medical test?

Life is filled with so many uncertainties and navigating through it without any proper backup is quite risky. A term insurance policy provides you with a backup that takes care of your family’s financial commitments when you are not there anymore. The insurance company pays the death benefit amount on receiving the death claim from the nominee, but there are chances that this claim might get rejected. This happens mostly when you avail of term insurance without medical tests and not declaring any pre-existing diseases at that time but eventually dying due to it.

Mr. Shantanu, a 30-year-old senior manager in a private firm, wanted to take a term insurance policy and was looking at available options that will provide complete protection for his family after his demise. He came across many term insurance policies that required him to undergo a medical test, while some did not specifically ask for it. Mr. Shantanu’s friends told him to buy the term plan without a medical test as he was already healthy and not suffering from any lifestyle disease. 

However, he still chose to undergo a medical test recommended by the insurance company to avoid any future complications at the time of claim. After the medical test, he was diagnosed with high blood pressure, which he promptly disclosed in the term insurance application. With this diagnosis, he immediately consulted a doctor to treat his BP condition while it was at an early stage itself. If Mr. Shantanu had gone ahead in buying a term policy without undergoing a medical test and succumbed to BP later, there is a very high chance for his claim to get rejected. Moreover, it was a good chance for him to understand his health condition and make necessary adjustments.

Disadvantages of buying a term plan without a medical test

A term insurance policy is mainly availed to provide lifelong protection for yourself by taking care of your family’s financial responsibilities in case of untimely death. By not providing a clear picture of your health to the insurance company, the insurer is taking a considerable risk, impacting your coverage amount and premiums.

• High chance of claim rejection: By buying a term plan without medical tests, you are exposing yourself to the multiple health complications that you may have in your body, which could affect your health in the long run. Individuals are also required to disclose any pre-existing illness or disease in the application form. Failing to mention any such condition at this stage will lead to claim rejection at the time of settlement if the policyholder’s death is due to the same pre-existing condition.
• Low Coverage: There are term insurance plans that can be taken without undergoing a medical test, but such policies offer low sum assured compared to the high coverage provided by plans taken by individuals after medicals. Life cover or sum assured is the main reason for opting for a term insurance policy as it is the amount that compensates for your family in your absence. It is the reason why one crore term insurance policies are in demand now, as this amount shall be helpful for the family to handle the rising costs and still reach their goals.
• High Premiums: The premium paid towards a term insurance policy taken by a 20-year-old is low because of the young age, which means fewer health issues. As the age of the policyholder increases, the premium to pay goes higher because of the risks to be covered. Suppose any health issue is determined in the medical test. In that case, the premium amount shall differ accordingly since the insurer is covering the risk of any significant complication due to that health condition. Without undergoing a medical test, the insurance company will fix a higher premium on the term plan since they do not have a clear idea of your health condition.

Benefits of buying a term plan after a medical test

Having read about the disadvantages of buying a term insurance plan without a medical test, here are the top benefits or advantages that one will enjoy if one avail of a term plan after taking up medical tests.

• Customized Plans: Term insurance policies come with various customization options for you to choose based on life needs, including coverage options, riders, premium terms, etc. By undergoing a medical test and furnishing your medical report to the insurer, you will have access to tailor-made plans that are tailor-made to suit your profile.
• Transparency: A term plan is meant to be taken for a longer tenure, and it is possible that anything could happen in the process. So is the reason why insurers expect your medical history to make sure they assess the risk before covering your life. The medical report will consist of the general findings relevant to your Blood Sugar, Haemoglobin Count, Cholesterol, ECG, Heart health, etc. More advanced tests may be required if the individual falls under a higher age group and could carry higher risk. Also, disclosing any pre-existing illness or disease in the application creates transparency, so your family is spared any issues at the time of claim filing. It is highly recommended to be transparent with the insurance company while buying a term insurance policy, even if it requires paying a little extra premium than getting your claim entirely rejected due to concealment of facts.  
• Low Premium & High Coverage: As mentioned above, by being transparent in disclosing your medical history and undergoing a term insurance medical test, the insurer can picture you as an individual and the risk factors. This makes you eligible for a term policy with high coverage value which ultimately gives you peace of mind from uncertainties. Not only this, but your premium amount also reduces significantly by way of discounts if you belong to the low-risk category and do not have any significant health complications.

You may be lured by the promotions of insurers offering term plans without a medical test but undergoing a medical test will give a peaceful mind for yourself and for your family to stay safe in the future.