Why Your Medical History Matters When Buying Term Insurance

IndiaFirst Life
• 11 Nov, 2024

Term insurance is one of the simplest types of life insurance. It provides coverage for a specified term duration and pays out a death benefit to the beneficiaries if the life assured were to pass away during this term. The premium you pay is determined by several factors, including your age, lifestyle, and health conditions.

Term insurance is also designed to ensure the life assured gets the right coverage while keeping in mind their unique circumstances. To understand these circumstances better, the term plan you choose may require you to undergo a medical test or expect you to be transparent about your medical history. A medical test in term insurance could be considered non-avoidable, as the health of the life assured can affect their mortality, and in turn, the premium costs.

Importance of Medical History in Term Insurance

Medical history plays a significant role in determining the risks associated with insuring an individual. When you apply for term insurance with a medical test, the insurer uses your medical history to evaluate your overall health. This includes any pre-existing conditions, family medical history, lifestyle habits such as smoking or alcohol consumption, and other health indicators.

The importance of term insurance lies in the financial protection it offers, but the risk to the insurer needs to be balanced. Therefore, insurers require a medical test for term insurance to ensure they fully understand the risks involved.

Medical Test in Term Insurance

A medical test in term insurance is often mandatory for applicants, especially those over a certain age or seeking high coverage amounts. These tests typically assess critical health parameters such as:

Blood pressure
Blood sugar levels
Cholesterol levels
Body Mass Index (BMI) (you can calculate your BMI using a BMI calculator)
Heart health via electrocardiogram (ECG)
Liver function
Kidney function
Lung function

These tests give insurers a comprehensive picture of your current health and any potential future risks. If your test results indicate a higher health risk, your premiums might be adjusted accordingly.

How Medical History Affects Premiums

Your medical history directly affects the premiums you will pay for term insurance. A clean bill of health can lead to lower premiums, while pre-existing conditions or risky lifestyle habits might result in higher costs. Here's how medical history impacts different aspects of term insurance:

Pre-existing Conditions

If you have medical conditions such as hypertension, diabetes, or a history of heart disease, you will likely be considered a higher-risk candidate. Insurers might increase your premium to offset this risk.

Lifestyle Choices

Smoking, alcohol consumption, or obesity can lead to higher premiums. For example, smokers generally pay more for life insurance than non-smokers because of the increased risk of life-threatening diseases.

The older you are, the more likely it is that you will have health issues, which can increase your premium. In some cases, the insurer may refuse to issue a policy if the health risk is deemed too high.

Benefits of Term Insurance with Medical Test

In addition to the financial security it provides, term insurance has several key benefits. It typically offers higher coverage at lower premiums compared to other types of life insurance policies. In case of your untimely death, the policy ensures your family is financially protected and can maintain their standard of living. The benefits of term insurance also include the flexibility to choose riders, such as critical illness coverage, which can provide additional protection against specific health conditions.

Now, opting for term insurance with a medical test comes with its set of advantages.

Lower Premiums for Healthy Individuals

If your medical tests reveal you are in good health, you may qualify for lower premiums. This can make term insurance more affordable and provide you with higher coverage at a reduced cost.
Transparency in Coverage

Undergoing a medical test ensures there is no ambiguity regarding your health status. This can reduce the risk of claim rejection due to undisclosed medical conditions.
Tailored Coverage

Based on the results of your medical tests, you can choose a policy best meeting your needs. If you are diagnosed with a particular condition, you may opt for higher coverage to protect your family financially in case of unforeseen events.
Reduced Claim Rejections

A medical test provides a clear picture of your health at the time of policy purchase. This reduces the chances of claim rejections due to undisclosed or misrepresented medical information.

The results of medical tests play a critical role in determining your eligibility for term insurance and the premium you will pay.

Why Insurers Require Medical Tests

The primary reason insurers require medical tests is to gauge the risk of insuring you. This helps them set premiums that reflect your risk level. Additionally, these tests help in:

Avoiding Unnecessary Risks: Insurance companies use these tests to avoid underwriting policies for high-risk individuals without adjusting premiums accordingly.
Accurate Risk Assessment: Insurers can accurately assess the likelihood of a claim being made during the policy term, allowing them to price their policies more fairly.
Ensuring Adequate Coverage: Medical tests also help you determine the right amount of coverage based on your health. If you have higher health risks, you may want to opt for a higher sum assured to ensure your family is financially secure.

Your medical history is a critical factor when purchasing term insurance. It affects not only your eligibility but also the premium you will pay. By understanding the importance of undergoing a medical test in term insurance, you can make informed decisions that benefit both you and your family in the long run. Investing in term insurance with a medical test ensures that your coverage is tailored to your health needs, providing peace of mind and financial security for your loved ones.

by IndiaFirst Life
Headquartered in Mumbai, IndiaFirst Life Insurance Company Limited (IndiaFirst Life), with a paid-up share capital of INR 754.37 crore, is one of the fastest growing private life insurers in India in terms of New Business IRP in Fiscal 2023. Our key differentiators are our simple, easy-to-understand products that are optimally priced. As of Sept 30, 2023, we offered 30 retail products, 13 group products along with six riders (across retail and group portfolios), along with policies under the PMJJBY scheme, catering to protection, savings, health and retirement needs of our customers, leveraging multiple distribution capabilities and augmenting various investment options. In all propositions under the categories of Participating Plans, Non-Participating Savings Plans, Non-Participating Protection Plans, Unit Linked Insurance Plans, Group Protection Plans, Corporate Funds Plans, Riders & PMJJBY form a complete suite of offerings that help our customers prepare for the certainties of life. Our products are easy to understand and optimally priced with a developed comprehensive risk management framework/policy.