Saturday, June 2, 2012

Is It a Good Idea to go for a Medical Check Up before taking a Life Insurance Policy?


Have you ever taken a life insurance policy? If you have, then you must have invariably heard these words from your Insurance Agent “Sir, if you take a policy for less than 10 lakhs, there is no need for a medical check-up and so, it is easier and faster for you

Have you heard these words? If so, this article is just for you…


What is a Medical Check-Up for an Insurance Policy?

A Medical Check-up while taking an Insurance Policy is just another medical check-up that is done by a doctor authorized by the Insurance Company to ensure that you are hale & healthy at the time of taking the life insurance policy. This is usually mandatory for high value policies because, for the Insurance Company, selling this policy is a business and they don’t want to shell out huge sums of money as compensation when an unhealthy individual takes a policy and dies soon after. So, they take the cautious approach and have a doctor examine your physical health before they actually give you the policy.

Is taking this Medical Check-up a good idea?

Of Course yes. Do you remember the earlier articles I have written on Life Insurance? I have always suggested that we be insured for at least 5 or even preferably 10 times what our annual income is so that our family does not encounter any financial hardships in our absence. So, if you want to ensure your families wellbeing and take a policy that is adequate, going for this Medical Check-up might not be an option but a Mandatory Requirement.
Most importantly, if anything unfortunate happens to us after a few years, proof that we were healthy at the time of signing up for the policy will come in very handy during the Claim Settlement and there will be minimal delays in money reaching our family.

Why do Insurance Agents Say Such a Thing?

Money…


What else did you expect???

First and foremost, for the Insurance Agent, the more policies he sells, the more commission (income) he gets.

Secondly, this commission will be paid out only if the Policy is finalized by both parties. If the Insurance Company rejects the policy for whatever reason it may be, the commission is not paid to the agent. So, even if our health check-up fails, the agent isn’t going to be paid even a penny.

Thirdly, this doctor fee is usually borne by the Agent as part of his job.

So, to avoid spending money out of their pocket and to ensure that they get paid for the policy they sold us, agents advise customers against taking policies for large amounts.

What is the Alternative Agents Advise us?

If our health check comes up with some issues, the Insurance Co will most probably reject our policy and in turn reject the commission to the Agent. So, to ensure that they get paid on the policy sale, they try to convince us that taking multiple policies is a better idea than taking one single policy.

Actually speaking, let’s say you have 3 policies worth 10 lakh each instead of one policy for 30 lakhs, in all probabilities, the claim settlement will get delayed because, from the Insurance cos perspective, the amount they are going to settle to our survivors is the same. If they club up all these policies and see that there has been no medical check-up done at the time of policy sale, they might delay the claim settlement. The whole purpose of us taking these policies will be defeated if our wife or children can’t have access to the funds after our time. Doesn’t it?

Verdict

As I have said numerous times in the past, including articles like "I will not blindly trust my Insurance or Investment Advisor" always be cautious and careful while buying Insurance Policies. Most of these insurance agents are devious fellows who are more concerned about making a quick buck at our expense than actually selling us a good insurance product.

So, be cautious and do what is best for you and your family. After all, we are taking these insurance policies to ensure the well-being of our family after we are gone. Isn’t it? So, we must ensure that this main purpose of taking the insurance policy isn’t defeated at any cost and for any reason.

Happy Insuring Yourselves!!!

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