Why Medical Test is Important in Term Insurance

 Important in Term InsuranceNo medical tests required’, you will find this clause blatantly used as a catchy ads for a prospective buyer. But is it really worth buying a term insurance without undergoing medical tests?

The purpose of undertaking medical tests before buying a term insurance is to determine the health quotient of the applicant.

Based on the test results the insurance company gives you a customized insurance plan. However, if you fall for the advertisement and go for a term plan that might not require you to take immediate medical tests, it is not without risks.

This might have repercussions in the long run. Let’s demystify this advertising gimmick and unravel the truth behind it.

hdfc cancer couple

Higher Probability of Claim Rejection

The exemption from medical tests does not mean you can sweep your health problems under the carpet.

You will still be needed to make a statement about your health condition in the application form. If you hide a health condition, it can have severe consequences on your insurance cover. Roughly, 2-3 % of claims end up in the trash due to this every year.

Pay More Premium

An insurance company decides the premium based on risk perception. Taking a medical test prior to buying a term policy can significantly lower your premiums.

Let’s understand this with an example: Two persons applying for the policy undergo a medical check-up. One comes up with normal sugar level and other with a borderline case.

The one with normal sugar level is required  to pay lower premium as compared to the other. However, if the policy didn’t require medical tests then both of them would end up  paying the same amount of premium. Certainly, a loss for the healthy applicant.

Moral of the Story

You can lower premium cost by showing medical fitness certificate to your insurance company.

Lesser Risk Coverage

The policies that encourage ‘No Medical Test Required’ theory are generally low-value plans. Even if you are young and healthy, no insurer will provide a cover of more than 5 lakh without a medical test.

Therefore, if you are looking for high insurance cover then you medical examination is neccessary.

Here’s the table showing risk cover viz-a-viz age group of the people who have to show the medical report to their insurers before buying a policy.

Risk Cover/ Age Group

18-30 Years

31-40 Years

41-50 Years

Up to Rs. 2 Lakh

Nil

Nil

Full Medical Report

Rs. 2-5 Lakh

Nil

Full Medical Report

Rs. 5-10 Lakh

Full Medical Report

Full Medical Report + HIV Test

Full Medical Report + HIV Test

Rs. 10-20 Lakh

Full Medical Report + HIV Test

Full Medical Report + HIV Test + Blood Serum Test

Rs. 20-30 Lakh

Full Medical Report + HIV Test + Blood Serum Test + Routine Urine Analysis

Full Medical Report + HIV Test + Blood Serum Test + Routine Urine Analysis

Rs. 30-40 Lakh

Above Rs. 40 Lakh

Full Medical Report + HIV Test + Blood Serum Test

Full Medical Report + HIV Test + Blood Serum Test + Routine Urine Analysis + Comprehensive Trail-making Test

*Full medical report includes ECG, fasting blood sugar, blood count and blood pressure tests. It may also include certain kidney and liver tests.

So, if you are buying an insurance policy, go ahead and take that medical test first. Trust us, there is no escaping from the medical tests, eventually.

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