Consider policies that waive health check-ups

Those with pre-existing conditions should opt for ones that require medical screening

The pandemic has brought home a new-found realisation of risks to our lives. This has sparked demand for annuities, life and health insurance products, according to media reports. In keeping with these times, insurers are now offering products where you don’t have to step out of your house to undergo a medical check-up.

People are increasingly buying what has always been a push product. Says Melvin Joseph, founder of Finvin Financial Planners: “There has been a sea change in people’s mentality after Covid, with many looking to buy high-value term policies with a sum assured of ~1-2 crore.”

Earlier, endowment and moneyback policies sold more, but that is changing. Says Joseph: “The returns are barely 3-4 per cent on traditional plans. If you are your family’s sole breadwinner, you need a high-value term plan. Anyone with a white-collar job, dependent spouse, children and a house should have a term cover of around ~2 crore nowadays.” Here are some factors that you should consider when selecting an insurer:

Brand matters:

Purchase term insurance from a reliable player. Says Naval Goel, chief executive officer and founder of Policyx.com: “This is a long-term, highvalue product. Buy the policy from a big, reputable brand that will still be around 30-50 years later.”

The claim settlement ratio reveals the percentage of claims the insurer has paid out during a financial year. Higher the ratio for an insurer, the better it is. This information is available on insurers’ websites.

Medical and non-medical policies:

Policies usually require a medical test, but nowadays there are some that waive this requirement. Take, for instance, ICICI Prudential’s iprotect Smart Policy launched exclusively with Policybazaar. Says Santosh Agarwal, chief business officer-life Insurance, Policybazaar.com: “This non-medical offering does not require you to undergo a medical test. There’s no verification call from a doctor either. This policy is machine underwritten.” This means you get the policy if you meet a few predetermined criteria.

For some, however, it might be a good idea to undergo a medical test at the time of purchase, or at least a verification call with a doctor. Says Pankaj Mathpal, managing director, Optima Money Manager: “If you have a medical history, a complicated case, or the simple need to explain things, a policy where a physician verifies the medical papers or talks to you on a call and goes through your history works better.” Adds Goel: “If you have a preexisting condition, disclose everything and opt for a policy with a compulsory medical test, and not one based on self-declaration.”

Never lie at the time of purchase. Says Joseph: “If you provide misleading information, it could lead to rejection at the time of claim.”

Finally, diversify to reduce risk. If you are buying a ~5-crore term cover, buy two policies of ~2.5 crore each from separate insurers. “In case one claim gets rejected, the other might be accepted. Diversifying is also beneficial since these are very longterm products,” says Goel.