Why Medical Test Is Important While Buying Term Insurance

Term insurance is the most basic type of insurance that you can get to safeguard your loved ones. But it is crucial to reveal your medical history and existing conditions if any, as it plays a role during claim settlement. Most insurance companies also ask you to take a medical test before offering you an insurance policy. Here is why a medical test is important.

Importance of Medical Test

A medical test is done to determine if the policyholder has any health problems to understand the amount of risk being taken by the insurer. You may reveal certain conditions like diabetes or blood pressure but to ensure that you are healthy, a checkup is required. If you refuse to go ahead with the test, the insurer will charge a heavy premium due to health issues that are unknown to the company. Also, it depends on the insurer to cover or exclude any conditions you may have. Here are some factors that get affected by the medical test:

  1. Premiums:

The underwriter appointed by the insurance provider determines the amount of premium to be paid by you after considering the potential risk factors. These factors are pre-existing health issues that you may have, lifestyle habits like drinking and smoking, etc. It is vital for an insurer to gauge the amount of risk being taken and the probability of a claim being made. If it’s high due to lifestyle habits, then a higher amount of premium is charged. Some insurance companies do not cover your pre-existing health problems and end up excluding them from the policy. But if you do not take the medical test, the insurer is no longer aware of any issues, hence, causing them to charge hefty premiums.

  1. Sum Assured

Sum assured is a crucial part of a term life insurance plan, as it provides for your family if something were to happen to you. Most of the time, it’s the policyholder that decides the sum assured required by the family in their absence. But if you refuse to take a medical test, the probability of you getting a high sum assured reduces. A death benefit that cannot financially support your loved ones is of no use. Thus, getting a checkup done for a lucrative sum assured is important.

  1. Claim Rejection

Rejection of claim is a fear many policyholders have which leads the family to become financially dependent on someone else. If you do have a pre-existing condition, your family’s claim will be rejected anyway as the insurer wasn’t aware of your health issues. To avoid such circumstances, it is advised to take the medical test and secure your loved ones.

  1. Low Coverage

If you buy a life insurance policy without a checkup, then the policy will provide you with lower coverage than what you would get with a test. As the insurer has to compensate for the potential risks linked with unknown health problems that haven’t been revealed to the insurer, you end up with a low cover.