How to change your Term Plan

If you had already purchased a costly term plan for yourself or a family member and now getting better offers, you should consider switching to new plan. However, you have to consider some points like your health condition before changing the plan. Should You Change your Term Plan: Why and How is what this article will tell you.

The premiums for term plans are decreasing day by day. Things are expected to get better from the buyer points as all insurance companies are trying to lure new customers. Now this is good news for people who have yet not purchased their term plan and are thinking to buy one. But what about people who had already purchased their term plan in the past few years. Since, they had purchased it earlier; they have to pay higher premiums for the entire policy tenure. There is one option for such people and it is to discontinue the old policy and then start a new one. This way they will have to pay less premiums which will save a lot of money in the long run. But is it a wise approach? In this article, I will discuss regarding the factors to consider while changing the term plan.

Things to Consider Before Changing the Term Plan

Following aspects need to be looked after before changing the term plan :

Your Health Condition
As we know that the premium for a term plan also depends on the health of the individual applying for it. Thus, if you have acquired some disease after taking first policy, you will have to pay higher premium for the new policy. An important thing to remember is that the premium shown by premium calculators present on official website of insurance companies is not the actual premium. Once your medical is done, you are informed the exact amount of premium that you will have to pay. Another similar situation is if you have acquired the smoking habit during this interval. In this case also the premium will rise and thus it might not be a wise decision to change the term plan.

Get the New Policy First
An important thing to consider here is that first you should get the new policy and then discontinue the old one. This is just to remain on the safe side as there might be some problems in getting the new term plan.

Early Claim
Another important thing here is that an insurance claimed within two years of starting the policy is referred to as early claim. In case of an early claim, the insurance companies check the whole case in detail. However, in case of policy being older, the checking is not that strict. Thus if your policy is 2 years old or more and you change to new policy, you lose this benefit.

How to Change the Term Plan in India?

Now that we have discussed the details related to changing term plan in India, the next question is how to complete the process. It is quite easy as you do not have to do any formality to stop a continuing term plan. You just have to stop paying the premium. Once the grace period is over, the policy is discontinued. It is advised to buy the new policy before discontinuing the old one. This way you will remain insured during the transfer interval as well.

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