July 22, 2021

We often do a lot of mistakes while filling up insurance proposal form and the same can affect us adversely. Consider a case where someone dies within 1 year of purchasing a life insurance policy and the nominee claims the death benefit. However, the claim gets rejected on the basis that the policy holder did not declare that he had another policy of higher sum assured from the same insurer and the same agent while signing up for this policy. Hence, even though the policy holder paid all the premiums, the claim got rejected.

Such cases are not rare. More often than not, people blame the insurance company saying they are unnecessarily delaying the claim. However, insurance is a business which works on the basis of ‘Principle of utmost good faith’. It is a common principle which means every person who enters into a contract has a legal obligation towards each other to disclose the material facts which affect the subject of contract is imperative. The person, therefore, has to provide honest and accurate information to the insurance company. The insurance company on the other hand also has to act on good faith and provide honest and accurate information.

Common Mistakes While Filling Insurance Proposal Form

So, what are the common mistakes that people do?

Non Disclosure of Medical Condition

Many a times, people do not disclose the current health condition in the insurance proposal form. However, in the medical history section, the entire medical history should be mentioned. While making the claim, if it is found out that the medical history does not match, the claim might get rejected.

For example, Mr A had diabetes for a long time. However, in the form, he did not mention the same. However, when he is admitted to the hospital for treatment of a heart disease, the fact that he has had diabetes was revealed as a result of which, the entire medical claim go rejected.

Not Providing the Accurate Details

While filling up the form, people become casual and they fail to provide correct details like height, weight, reasons of death of family members, etc. Mentioning the correct details is extremely important. If you do not provide the correct height and weight, claims can get rejected in future because a BMI of above 29 normally attracts higher premium. Similarly, some diseases are hereditary. If the same are not declared in the proposal form, claims might get rejected in future.

Non Disclosure of Other Insurance Policies

It is very important to mention all the policies taken from the same insurer and other insurer, many a times your agents might tell you not to. As the total sum assured goes higher, the risk with the insurer also goes higher and therefore, you might have to go in for medical tests. We would suggest to go through the medical tests rather than going for a claim rejection later.

Non Disclosure of Avocation Details

People sometimes do not reveal important facts like whether they are a politically exposed person, whether they have any hazardous habits like paragliding, parasailing, rock climbing, etc. All these are important to mention since the risk of life increases.

Mention your Occupational Details Accurately

People often do not mention the nature of job or service they are involved in. If you are in the profession such as aviation, the risk on your life will be higher and the declaration needs to be done to the insurer.

Don’t let your Agent fill up the Proposal Form on your behalf. The proposal form will seek material information regarding you as a life insured and agent might now know the right details or might fill up the form as per his intentions to get the policy issued for you by hook or crook (not in all cases). So it is important you fill up the details by your own as per best of your knowledge.

Additional Reading:- Avoid These Mistakes While Buying A Health Plan!

Other than the above mistakes, it is important to read the proposal form thoroughly, in case you have any apprehensions regarding the understanding of the proposal form. It is important to get it clarified from your insurer. Sometimes, the person filling proposal form interprets the question in some other sense which may also lead to non disclosure or misrepresentation of the important material information. So it is imperative to understand the information asked by the insurer incompleteness and furnish the right appropriate details to let the underwriters assess your risk appropriately.

Commonly, people do not read the form carefully and blindly sign, trusting the agent to fill up the most important information. This is something, everyone should avoid at any cost. The agent will not know details about the person to be insured. Hence, it is important to fill up the form carefully. It is better to be safe than sorry at the time of filing for a claim.

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