It may soon become compulsory to appear for a thorough medical examination before you buy a term life insurance policy of any amount. Currently, underwriters in most of the insurance companies require a medical examination above a specific sum assured (usually 50 lacs) but now the test will be mandatory for a sum assured of 2 lacs as well.
Lately, the insurers have observed incorrect representation of facts such as personal medical history, family history, etc. especially, in case of small cover term insurance policies. This suppression of facts misleads the whole underwriting process and directly impacts the claim settlement decision. Munish Sharda, MD & CEO, Future Generali Life Insurance, said, “We don’t have an online term plan but offer offline term plan (sold by agents). We have seen challenges in some areas and segments on account of non-disclosure of the existing diseases and also because of misrepresentation and fraud. We have strengthened our due diligence process and have made medical tests mandatory for policies coming from fraud prone areas.”
HDFC Life Insurance, one of the market leaders in online term plan, has already discontinued term plans below 50 lacs and have mandated medical examinations for all prospective buyers. Mandating medicals might help insurers to decide how much coverage the client should receive, how much s/he should pay for it, or whether even to accept the risk and insure them basis the medical results.
