You walk into a life insurance company and buy a life insurance policy for Rs. 7934/- per annum for a Rs. 1 crore sum assured. The company accepts the cheque and asks you to go for a medical test.

What are the scenarios that can happen?

Best case scenario, they can say, yes you are 28 years old (chronologically and physiologically, so here is the policy)

Next scenario – they can say, sorry you are chronologically 28, but physiologically you are 33 and so you will pay Rs. 9345 per annum.

Next scenario – they can say, sorry your medical condition is such that we cannot take a decision now, please come to us after 6 months.

Worst scenario: they can say, your life is not worth insuring, please take a walk.

the second situation of asking you to pay a higher premium is called ‘rate up’.

What would I do if I am told ‘Subra you have a health condition because of which the premium is Rs. 9345’ I would take the plan, IMMEDIATELY.

This is because my health could deteriorate quickly and I might become uninsurable (which means no loans, and high risk). Then I will work my butt off and improve my health.

One year later I will shop around again, and if I can, I will get a new insurer who will give me a cheaper plan.

Typically people get into a stupid denial mode and say ‘How can I be rated up’…blah blah…and give up this plan. That is the stupidest thing to do.

It also happens like this because the insurance company does not know how to convey the rate up. I hope I have done a good job.

I ask people ‘Yes I agree you will reduce your BP in 3 months, but if you were to die tonight, what would happen to your family?’ sadly the salesman cannot.

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  1. @ANUSH
    i think, subrabhai talked about the scenario , as scenario two , could not be pointed by the insurer, or , it is only indicative of the third scenario. and as i understand from experience that the insurer is not giving any reason for increasing your premium , at least , in writing.
    in my case,probable in 2002, when i proposed a term insurance at age of 55 to hdfc standard life, if not mistaking, the first term life insurance introucers to retailers in india , they raised my premium @20% or so after my medical check up, without giving any reason in writing, which i accepted.afterwards i requested them to convey the medical check up findings for my knowledge and for improving my health through email and through agent, in vain.

  2. I just took a term life online from ICICI called iCare… there’s no medical checkup and the premiums are a little higher than peers as the risk is spread out…

    Subra, any comments on this policy? Is it safe to have a term insurance w/o medical check-up?

  3. Subra Sir,

    Excellent write-up. Most of the time people’s ego come up as to how come they have increased the premium and they look elsewhere for cheaper premiums.


  4. Term insurance without MEDICAL CHECK UP looks like a joke. They must have taken a declaration that you are medically perfect – or overpriced the product.

    i do not know about this product, but try some other company WITH MEDICAL CHECK UP…DEPENDING on your age try Kotak, Religare, Aviva – …

  5. Hi Sir,

    Recently, I have bought life insurance via religare online.Based on my medical condition and family history, premium has been increased close to 175 % ( from 6,200 to 17,400 ). Does It makes sense to go for this policy? Or should I shop for better policy in some other company like Kotak/aviva after taking this policy?

    Balaji T K

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