How to change policy details post purchase
How to make changes to your life insurance policy details to optimize your protection and financial security.
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A life insurance policy is a cover that aims to provide a financial cushion to the dependents in the event of the untimely demise of the policyholder 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 opted for, etc. For several reasons, you might want to make changes in 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.
What is a policy endorsement?
A policy endorsement is a process to make changes to the insurance policy purchased by a policyholder. These include changes made to an existing insurance plan like the addition of a rider, changes in nominee, deletion of certain details, and many others. Note that these amendments made to the insurance plan may affect the premium as well.
How to make an endorsement
To make an endorsement in the life insurance policy, the policyholder needs to 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 reflect in the new policy document.
Reasons to change details after purchasing a life insurance plan
Some of the common reasons to change 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. During the policy term, if the marital status of the policyholder changes, 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 loss of job or loss of other forms of income you may want to re-evaluate 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. There are provisions in some insurance plans that the amount of the premium decreases with the improvement in the overall health of the policyholder. 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, 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.
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 like spelling mistakes of names, addresses, contact details, and others should be checked thoroughly. Any discrepancy may lead to complications during the payout to the nominees.
Changes in free look period
This period is usually 15 to 30 days after the insurance purchase. During this period, in case the policyholder thinks that the policy purchased does not match their needs, they can cancel the policy anytime. The premium paid is usually refunded with some deductions applied. This will depend on the terms and conditions of the insurer.
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 as follows: monthly, quarterly, half-yearly or yearly payment. This depends on the convenience of the policyholder and can be easily done by contacting the insurer and completing the change application as provided by the company.
Changing beneficiaries
Beneficiaries in the case of 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 to name a minor as a beneficiary should be clearly understood.
Add or remove Riders
The option to remove a rider is offered by almost all companies. For this, a request application is to be filled out by the policyholder. The addition of a rider can either be done during the time of purchase of the policy or renewal of a plan.
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 the changes are valid till the maturity date of the policy or till 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.
Endorsements may call for some special exclusions or modifications in coverage. These should be clearly understood at the time of making the endorsement.
Endorsements are a great way to add protection benefits. These should be included in the basic insurance plan to make it more comprehensive.
Endorsements help in addressing items or requirements that the original policy might lack.
Endorsements can be added at the time of purchase renewal of the policy or during the policy term.
Frequently Asked Questions
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 coverage may even be cancelled by the insurer. To avoid this, no information about risk factors should be kept back 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 scope of 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.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.
