Insurance contracts are based on the principle of ‘Uberrima fides’, or utmost good faith. The pricing of a policy and the assessment of risk is based on the disclosures. In your case, the insurer may decide on the status of contract, whether to continue or otherwise, depending on the nature of fresh disclosures. In case of continuation, the insurer may alter the premium to factor in additional risk, if any. In case of incomplete or incorrect disclosures, the insurer reserves the right to terminate the contract or reject the claim, if it comes to that. It is, therefore, in the policyholder’s best interest to disclose all information sought.
Can I pay my half-yearly insurance of R26,000 by cash?
Different insurers have their own policies regarding acceptance of cash, aligned to anti-money laundering guidelines in force. Usually cash payments of up to R50,000 are allowed for paying insurance premiums. However, it is strongly recommended that you use a mode such as cheque, demand draft or online payment for your own safety and record. If you have to pay in cash, then it is recommended that you go to your insurer’s branch and do so yourself.
How do I give the bank an ECS mandate to deduct the premium from my savings bank account?
Usually you are required to submit the ECS mandate, along with a cancelled cheque of the account from which you want to auto debit the premium to your insurer. The ECS mandate form can be downloaded from your insurer’s website. Do check with your insurer for more details.
The author is executive vice-president, Kotak Mahindra Old Mutual Life Insurance
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