What medical tests are required for term insurance?

Bajaj Allianz Life Insurance

Ever since the outbreak of the COVID-19 pandemic in December 2019, lives of people have changed entirely, and so has the way they think about their future. Almost 51 million people have already come in the grasp of the COVID-19 virus, and the number is rising by thousands every week. Of those, over 1.2 million people have lost their lives to the deadly virus ^[1]. Even in India, COVID-19 has claimed over 1.25 lakh lives with over 8.5 million recorded infections ^[2]. The possibility of a second wave is no more just a fear, but is very close to reality with the second wave of the virus already hitting Europe with even more force ^[3]. Amid all this uncertainty, there is a hesitation to lead our lives the way we used to before the pandemic. There is also a realisation that maybe we need to learn to live with the virus for a long time to come. This has convinced everyone – from the medical community to governments and individuals that we cannot let our guard down.

While there is nothing that can be done to prevent an unseen adversity from striking, being financially prepared can go a long way towards alleviating the difficulties of those who are left behind. During these unprecedented times, the importance of having the old tried-and-tested backup plan -- a term life insurance -- gains even more prominence. The idea to secure your family’s future, given the health risks everyone is under, is of paramount importance. A term life insurance policy would ensure that in case of an unfortunate event, your family’s financial welfare would be taken care of.

Term insurance is the purest form of life insurance. With such a plan, in the unfortunate event of the policyholder’s death, the nominee receives the death benefit, either in lump sum or in instalments, depending on the policy terms and conditions. This enables the family of the deceased to maintain their lifestyle and meet their life goals. It also ensures that they do not have to tap into their accumulated wealth due to the loss of income resulting from the demise of an earning family member. Any easy to use term insurance calculator can help ascertain how much insurance would be adequate to ensure that your family’s life goals are met, even when you are not around.

Effectively, a term insurance plan provides life cover for a nominal premium since it only covers risk and does not provide any maturity benefit. Hence, the premiums are low. In fact, it could be said that an average 25-year-old, non-smoker could purchase the Bajaj Allianz Life Smart Protect Goal, A Non-linked, Non-Participating, Pure Life Term Insurance Plan cover of Rs 1 crore for a policy term of 30 years at just Rs 18 per day^*.

Medical tests and term insurance

A study by PWC India (June 2020), titled ‘COVID-19: Impact on the Indian insurance industry’ ^[4], expects that term plans, also called pure life covers, will witness renewed interest. It did, however, observe that people were reluctant to undergo medical tests that are mandatory with some term insurance plans.

What individuals with such concerns may not realise is that undergoing a medical test before purchasing a term policy actually offers significant benefits. These medical tests help the insurer to determine the health quotient of the applicant

Benefits of taking the medical tests

A medical test simply ensures that both you and your insurer are on the same page with respect to the state of your health, at the time when you purchase the policy. Since insurance is based on transparency and good faith, it is best to share all the details of your existing health condition so that when the time comes to make a claim, there is no uncertainty. Failure to disclose your medical history could result in rejection of the claim.

By taking a medical test, you allow your insurer to consider giving you wider coverage, which in turn will help support your family in achieving their life goals in the unfortunate event of you not being around.

Types of tests required

When medical tests are mandated before a term policy is issued, they are basic exploratory examinations that ascertain the general level of the person’s wellbeing. These tests usually include routine urine examination and urine cotinine test, blood tests, complete blood count (CBC), lipid profile, liver function test, kidney function test, fasting blood sugar, ECG/TMT/2D echocardiography, abdominal ultrasonography, chest X-Ray and HIV. These are, in fact, the very same tests that are recommended by a general physician who wishes to prescribe a routine full-body check-up on his patients.

Therefore, in a nutshell, taking medical tests before purchasing a term insurance policy becomes a win-win situation for all.

* Above illustration is considering Male aged 25 years | Standard Life | Non-Smoker | Life Cover Variant | Policy term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Annual Premium Payment Mode | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only.

Disclaimer: The views, suggestions and opinions expressed here are the sole responsibility of the experts. No Forbes India journalist was involved in the writing and production of this article.