Buying a life insurance policy is a serious decision. Many times, the 'fine print' (policy clauses on restrictions and exclusions) is overlooked, deterring you from achieving your desired financial goals. We have therefore simplified the 'fine print' into 'big print' for your ready reference.
No liquidity in initial period
All unit linked policies have a lock-in period of 5 years and hence you will not get any liquidity during this period. A traditional policy also will not give you any value if you surrender your policy in 2 to 3 years.
Right to deny claim in first 2 years
The life insurance company has the right to deny the benefits in the first 2 policy years, on grounds of misrepresentation in the application form.
Bonuses on your policy
The bonus amounts in traditional policies are not guaranteed and are paid at the discretion of the company.
Your critical illness or health policy may have a waiting period during which the claim will not be processed.
If you have bought a unit linked policy, you are exposed to market-related risks. There are chances of losing money during difficult market conditions.
In case the Life Assured commits suicide within the first year from the start or revival of the policy, the insurance benefit is lost.
If your policy covers accidental death, disability, or critical illness, certain exclusions get added to the 'fine print'. For example, if you meet with an accident while driving a car under the influence of alcohol, it can annul your benefit paid under the accidental death cover.