Is There Any Waiting Period in a Term Plan?

 

A term insurance plan is the simplest kind of life insurance you can purchase. It is a pure life cover, meaning that you only get death benefits under this policy. So, in case the policy is active at the time of your demise, your nominee can raise a claim for these death benefits with the insurer. However, if you survive the policy term, you do not get any maturity benefits under the policy.

Make use of a term insurance calculator to determine the ideal amount of coverage required to protect your family financially before applying for a term plan — depending on various parameters like your age, your monthly income and expenses, your expected retirement age and other factors.

Before you purchase a term plan,  , you must be see through the fine print. And one area of the T&C that many new policy buyers overlook is the waiting period.

What is the Waiting Period in an Insurance Policy?

The waiting period is a clause that is generally present in health insurance policies and health-related life insurance riders (like critical illness riders). It defines the maximum period after which the insurance service provider will accept claims on the policy or the rider. This clause exists to minimise the risk for the insurance provider by ensuring that policyholders do not seek coverage for pre-existing conditions or illnesses.

Is There Any Waiting Period in a Term Plan?

No, there is no waiting period to raise a claim on a term insurance policy. A term plan is a pure life cover that does not offer financial protection in case of any medical emergency. The only contingency that a term insurance policy covers is untimely death during the policy term. Therefore, there is no need to attach a waiting period clause for a term plan.

Other Time-Sensitive Clauses/Exceptions You Should Be know of in a Term Plan

Although there is no waiting period per se for term plans, there are some time-sensitive clauses or exceptions that you need to know of. Here are the details.

• Coverage for Death by Suicide
  All term insurance policies offer coverage even for suicide. However, in most term plans, the coverage for suicide only commences after the completion of 12 months from the date of commencement of the risk (i.e. policy purchase).
• Waiting Period for the Saral Jeevan Bima Plan
  The Saral Jeevan Bima Plan is the only term insurance policy that comes with a waiting period of 45 days from the date of commencement of risk. If you are reviving this policy, the waiting period will not be applicable. It is only relevant when you first purchase the policy.

Conclusion

In addition to the waiting period and other time-sensitive clauses, it is necessary to read the fine print about the inclusions and exclusions under your term plan, the premium due dates, the payouts and claim-related processes. You must also educate your nominees about these details, so they are not caught unawares if they need to raise a claim on the policy. 

Related Articles:

• Make Your Online Term Plan Your Family's Monthly Pay Cheque
• Calculate and See for Yourself How Starting Young Gives You Lower Premiums
• What is the Age Limit to Buy a Term Insurance Policy?
• How much term insurance coverage does one need?

ARN - ED/08/23/3572