Introduction (Pain Point + Promise)
Cheap term insurance plans often look attractive because of their low premiums. But many of them come with hidden clauses that can cost your family their rightful claim. In this guide, we reveal the top 5 fine-print traps to watch out for in 2025 — so your plan actually protects, not punishes.
1. Exclusions for Pre-Existing Illnesses
Most low-cost term plans do not cover deaths related to pre-existing diseases unless declared and underwritten at the time of purchase. Even a minor omission (like high BP or diabetes) could lead to claim rejection.
If you have a health condition, always go for a plan that asks for medical tests and fully discloses your history.
2. Mandatory Waiting Periods (1–3 Years)
Some cheap online term policies come with a waiting period clause — meaning, if death happens within the first 12 to 36 months (non-accidental), the claim may be denied.
This is common in no-medical test plans. Families often discover this when it’s too late.
3. Suicide Clause Isn’t Just for the First Year
While most term policies include a standard 1-year suicide exclusion, some low-premium plans stretch this to 2 years or include vague mental health exclusions. If death is ruled as suicide or related to mental illness — claims can be denied outright.
Always read the suicide clause in your policy document — even if uncomfortable.
4. Low Claim Settlement Track Record
Some smaller or new-age insurance companies offer extremely cheap plans — but with poor claim settlement ratios. It’s not just about price — it’s about trustworthiness during the most critical time.
Check the IRDAI annual report before you choose any insurer. Look for 97%+ CSR.
Claim Settlement Ratio vs Real Experience — What Should You Trust?
5. Hidden Non-Disclosure Traps
One of the most common reasons for claim rejection is “material non-disclosure.” This can include:
- Past hospitalizations
- Minor surgeries
- Lifestyle habits (smoking, alcohol)
- Even overseas travel
If the insurer believes you withheld any such info (even unknowingly), they can legally deny your claim.
Always give full and honest disclosures, even if it increases the premium slightly.
Expert Tip from eBharat.com
“A term plan is not just about low premium — it’s about peace of mind. Spending ₹200 more per year is worth it if your family won’t have to run pillar to post for their claim.”
Related Tools & Resources
- Premium Calculator — Find Trusted Plans
- [Term Plan Comparison Tool — Hidden Clause Checker]
- [IRDAI-Approved Insurer Tracker]
Final Word
Cheap term insurance plans are tempting — but they’re not always safe. Before buying, read the fine print, understand what’s not covered, and choose insurers with proven records. A slightly higher premium today can save your family from heartbreak tomorrow.
👉 Check your best-fit term plan now with Insurance+ by eBharat.
🔗 https://ebharat.com/insuranceplus/
