Gulshan Sharma, 43, recently sought to enhance his term life insurance coverage by ₹1 crore, in addition to his existing ₹1 crore policy. However, before finalizing the increase with the insurance company, he underwent a video call with a doctor who inquired about his health status, smoking habits, and alcohol consumption. Although provided with a preliminary premium estimate, Gulshan was required to undergo medical testing.

Importance of Medical Tests

Medical tests play a pivotal role in the underwriting process of term life insurance policies. According to Rajesh Krishnan, Chief Operations Officer at Bajaj Allianz Life Insurance, these tests are crucial as they aid insurers in assessing an individual’s health and associated risks, which directly impact premium pricing.

Rhishabh Garg, head of term insurance at Policybazaar.com, emphasizes that medical evaluations are conducted based on customer declarations, followed by either tele-medical or physical check-ups. The insights gleaned from these tests enable insurers to make informed decisions regarding premiums and coverage eligibility.

Required Tests

While specific medical test requirements may vary among insurers, certain common tests are typically requested. These include blood pressure checks, blood tests for cholesterol and glucose levels, BMI measurements to assess obesity risk, urinalysis for kidney and metabolic issues, and ECGs to detect heart irregularities. Additionally, an applicant’s medical history, including past surgeries, hospitalizations, or existing conditions, is thoroughly reviewed to determine overall risk.

Impact on Premiums

The results of these medical tests significantly influence the premiums offered to applicants. Favorable test outcomes indicating good health often qualify individuals for standard or preferred premium rates, reflecting lower perceived risk to the insurer. Conversely, the presence of medical conditions may lead to increased premiums, with adjustments based on severity and underwriting norms.

Krishnan notes that conditions like diabetes or heart issues can result in substantial premium hikes, ranging from 20-100% or more, depending on severity.

Strategies to Reduce Premiums

Several strategies can help mitigate term insurance premiums. Maintaining a healthy lifestyle and accurate disclosure of health-related information are paramount, as insurers consider these factors during rate determination. Avoiding high-risk activities such as extreme sports and tobacco use can also contribute to lower premiums.

Furthermore, comparing quotes from multiple insurers and selecting coverage that best suits one’s needs and budget can aid in securing cost-effective premiums.

Understanding the role of medical tests in term insurance underwriting and implementing proactive measures can facilitate obtaining favorable premiums while ensuring adequate coverage for policyholders.