How to change Policy details post purchase

A life insurance policy is a cover that aims to provide a financial cushion to the dependents in the event of the policyholder's untimely demise during the policy term. What you essentially get upon buying a policy is a policy document. It consists of your personal details, information about the plan you opted for, etc. For several reasons, you might want to make changes to this document after you have bought it. Is this possible? Yes, it definitely is possible, and this article will help you regarding how to change policy details post-purchasing.

A life insurance policy is a cover that aims to provide a financial...

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What is a Policy Endorsement?

A policy endorsement is a process for making changes to the insurance policy purchased by a policyholder. These include changes made to an existing insurance plan, such as adding a rider, changing the nominee, deleting certain details, and many others. Note that these amendments may also affect the premium.

How to Make an Endorsement?

To make an endorsement in the life insurance policy, the policyholder must fill out the endorsement form stating the changes needed. This is to be submitted and reviewed by the insurer. In case the changes are approved, they will be reflected in the new policy document.

5 Reasons to Change Details after Purchasing a Life Insurance Plan

Some of the common reasons for changing the details of a life insurance policy are as follows.

Change in marital status

This is one of the most common changes that occur during one’s life. If the policyholder's marital status changes during the policy term, it should be updated in the life insurance policy.

Change in income

A promotion or increase in additional income may motivate a policyholder to increase the cover. On the other hand, in case of job loss or loss of other forms of income, you may want to reevaluate to decrease the burden.

Lifestyle changes

Lifestyle changes can be directly linked to one’s financial situation. An example of how to understand this is that a policyholder will be financially less burdened by closing mortgages or any outstanding debts. After this, their financial goals and expectations from a life insurance plan might change, which will motivate the policyholder to make a few changes to meet the changed needs.

Change in medical health

The purchased cover should be able to match the policyholders’ health status well. Some insurance plans have provisions that decrease the premium with the policyholder's overall health improvement. Any significant changes to one’s physical health should be communicated to the insurer.

Change in responsibilities

One’s financial responsibilities may change with time. Examples can be getting married, expecting a child, and having a child attend college or university. This can also be the opposite way, where a policyholder is finally done achieving his financial goals. In both cases, the life insurance cover should be updated accordingly.

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Common changes done after purchasing a life insurance plan

Here’s a list of common changes that are done to the policy document or the entire plan post-purchase.

Basic Details

Some basic details, such as spelling mistakes in names, addresses, and contact details, should be checked thoroughly. Any discrepancy may lead to complications during the payout to the nominees.

Changes in the Free-look Period

This period is usually 30 days after the insurance purchase. If policyholders think the policy purchased does not match their needs during this period, they can cancel it anytime. The premium paid is usually refunded with some deductions applied. This will depend on the insurer's terms and conditions.

Increasing the Cover

The coverage amount can also be changed under the life insurance plan by adding riders or top-ups to the base plan.

Change Premium Payment Frequency

Premium payment frequency can be changed to monthly, quarterly, half-yearly, or yearly. This depends on the policyholder's convenience and can be easily done by contacting the insurer and completing the change application provided by the company.

Changing Beneficiaries

Beneficiaries in a life insurance plan can be changed multiple times. Most people prefer to keep their parents or their spouse as beneficiaries. Note that the conditions for naming a minor as a beneficiary should be clearly understood.

Add or Remove Riders

Almost all companies offer the option to remove a rider. The policyholder must fill out a request application for this. A rider can be added either when purchasing the policy or renewing a plan. You can check out disability income, accidental death, critical illness riders and more.

Change Policy Term

The policy term can be changed by the policyholder by contacting the insurer and requesting the change. The policyholder may be asked to fill out an application and send it to the insurer. This can be done both online and offline.

Points to Remember

Some points to remember regarding making changes in the life insurance policy are as follows.

The endorsement or changes are valid until the policy's maturity date or until a specified tenure, as mentioned in the policy document.

An endorsement may affect the amount of premium paid towards a policy.

A copy of the new policy documents must be carefully studied and kept for future reference.

Riders are a great way to add protection benefits. They can be included in the basic insurance plan to make it more comprehensive.

Frequently Asked Questions (FAQs)

Here’s a list of common questions and answers related to making changes in the policy details post-purchase.

Why should I add a rider to my life insurance plan later if I forget to include it while buying the policy?

The addition of a rider makes the basic life insurance plan more robust. This means that it can increase the overall coverage and help you customise your plan according to your needs.

What if I do not inform the insurer about developing a terminal sickness after purchasing a life insurance plan?

Hiding any information related to risk factors may cause trouble during the payout to the beneficiaries. In certain situations, the insurer may even cancel the coverage. To avoid this, no information about risk factors should be kept from the insurer.

My income has increased, and I wish to increase my life insurance coverage. What should I do?

You should contact your insurer immediately and assess your already purchased policy. Any endorsements in the policy should be clearly understood and compared with your financial needs. Note that the choice of riders, top-ups, or add-ons may vary from one insurer to another.

Can I cancel my policy after 20 days of purchase?

Usually, the policy can be cancelled during the first 15 to 30 days of purchase.