Can you change a term plan’s specifications post purchase?

Term plans are the purest form of life insurance, which offers financial security to your loved ones at the most affordable costs. Term plans offer death benefit which is equal to the sum assured opted, by the policyholder during the policy term.

Term plans are the best plans which are available at the most affordable price to the customer providing the high sum insured amount at minimal premiums.The reason for the affordable premiums of a term plan is the simple fact that it only charges for providing a death benefit along with some policy administration charge. Also, the death benefit is payable if the life insured dies during the policy term.There is no maturity value attached with pure term plans.

Changes in Policy Specifications

Usually, the customer has to opt for plan specifications like sum insured, policy term, premium payment term, premium payment frequency, etc. at the inception of the policy. Once, the policy is issued these specifications are hard to change or alter. Some term plans offer an increase in the sum assured annually to combat inflation but that are prized on an upper end.

Term plans may not offer such flexibility in changing the policy specifications during the policy term, but there are other types of life insurance plans like unit linked insurance plans (ULIPs) which offer flexibilities like increase/decrease of the policy sum assured, change in premium, etc.

Free Look Period – An initial solution 

The Free look period is usually a 15 days time frame given to the policyholder and it starts once the policyholder receives the policy document.This period is given to the customer to reassess his/her decision regarding the plan opted for and the policy specifications. In case you want to alter the policy specifications, free look period can help you in such case. You may cancel your current policy with the insurer and the insurance company will refund you the premium amount after deducting minimal applicable charges. The new policy from the same insurer or different insurer can then be bought with your new plan specifications which include sum assured, policy term,premium paying term, etc.

It is very important to go through your policy document in detail and read the fine print once you receive the document.There can be instances for mismatch regarding the term policy issuance. The same can be looked upon conveniently during the free look period.

Another Life Insurance Product

In case you want to increase the sum assured and have a policy term, as per your changed financial goals, and thinks you are not adequately covered, you may opt for another life insurance plan as per your need and requirement. Insuring yourself for financial protection of your loved ones is important. An ideal sum assured could be 10 -12 times of your annual income. But with time, income increases and so is the need to have additional sum assured. It is vital to reassess your insurance needs time to time to ensure complete protection cover.

Other Specifications

The nominee or nominees can be ascertained during the inception and can be altered during the policy term any number of times. Other changes like change in address, updation of email id, mobile number, correspondence address, etc. can be easily done post the term policy is issued by contacting the customer care number, visiting the nearest branch of the insurer or through the customer’s portal.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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