Your Money: Get the details right on the insurance proposal form

Wrong information given in the proposal form can lead to your insurance claim being rejected

Your Money: Get the details right on the insurance proposal form
It seeks all the relevant information from you as that helps it in underwriting the risk.

By Sunil Kadyan

Insurance is an agreement between the insurer and the insured, which starts with the filling up of a proposal form. The proposal form is the most important document required for life or health insurance contract between the two parties. An insurance company offers a policy on the basis of a proposal form. It seeks all the relevant information from you as that helps it in underwriting the risk.

The proposal form includes the insured’s fundamental information like address, age, name, education, income, and occupation besides his medical history. Based on the level of cover you choose or age group, you may be asked to go for medical check-ups. These details are relevant because mentioning your age ascertains the premium you pay. The proposer and the life to be assured must also mention their incomes to satisfy the insurer about their ability to pay for the insurance and the need for insurance, respectively.

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Mention correct details
The form will also ask for nominee details which is essential because you need to make sure that the benefit reaches the right hands. The insured must mention the correct address, contact number and e-mail id because crores of claims and maturity amounts remain unpaid as insurers are unable to reach policyholders at the numbers and addresses provided by them.

The proposal form will also ask you about other life insurance policies that you hold and will have details of the policy that you are buying. Life assured has to disclose his/ her habits pertaining to consumption of alcohol and tobacco. Insurance is based on the principle of utmost good faith so all information provided by the proposer must be true and complete; otherwise it can lead to denial of claim. For example, in a health insurance policy, information regarding your health status and medical history will be required. On the basis of non- disclosure of pre-existing conditions, the insured claims can be repudiated.

Fill it yourself
In many insurances, it is paper-based and needs to be filled by hand. Sometimes, the information can be provided electronically. Your insurance intermediary, an agent or broker can help you fill the proposal form. The proposal form should be filled by the proposer and not by the insurance agent because this is the right time to understand your policy benefits. Some people sign the blank proposal form and hand it over to the insurance agent, this is not the correct practice and can lead to regrets later. The proposer should read this form carefully and take his time to fill it. It’s the responsibility of the proposer to verify all details before signing and submitting the proposal form.

The Insurance Regulatory and Development Authority of India’s Policyholders’ Protection Regulations mandates that a copy of the proposal form should be given to the policyholder along with the policy copy at the time of purchase of cover. The proposer can choose to attach a sheet of paper to the proposal form if he wants to share with the insurance company any information not sought in the form, which he thinks will help the company make an informed decision.

The writer is assistant professor, Amity School of Insurance Banking & Actuarial Science, Amity University Noida

Cover the risks

Always fill up the proposal yourself. Do not let the agent fill it up on your behalf
Correct information in the proposal form helps the insurer to underwrite the risks
Take a copy of the proposal form from the insurance firm along with the policy copy

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