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Do not sign on a blank insurance form

Life is precious and you cannot let your hard earned money go down the drain by falsified insurance policies. Life Insurance is purchased to ensure that your family is able to take care of themselves financially, in case of any unfortunate incidence. Whilst the emotional vacuum can never be filled, a life insurance policy helps your family in bearing the financial burden that befalls. 

My experience, over the past several years, has taught me many things that I would like to share with you.

Many times, I have seen people not being comfortable declaring pre-existing illnesses while purchasing a life insurance policy. The fear of raised policy premiums or rejection of a life insurance policy, altogether, renders individuals in a confused state of mind.

I would like to remind the readers that insurance is a business of utmost faith. The insurance company relies on your declarations and then decides to issue the policy.

At the time of making the claim, the claims department assesses all possible records of client’s illnesses and reasons pertaining to the cause of death. If it comes to light that a pre-existing illness was not declared, the insurance company CAN reject the claim and declare the reasons valid, as per Insurance Regulatory and Development Authority (IRDAI) requirements.

The question that we need to ask is - “What is the benefit of not declaring the current health status?”

If your current state of health is bad, then the worst case is that an insurance policy may not be issued. It is better not to have the policy issued, rather than paying the premium and not getting the benefit of the policy later on. In some cases, the policy may be issued with a higher premium.

Life insurance policy is definitely not to be taken lightly. It is a security that you provide to your loved ones in case of an exigency. It is better to take all factors and illnesses into account before you invest in one. I would like to reiterate that it is better to have a policy with higher premiums to ensure that the insurance company finds no reasons to repudiate a claim later on.

The root cause of the problem are two fold in my view –
a)     Lack of knowledge and understanding about the way the insurance industry works.
b)     Modus Operandi of sales agents.

I have seen cases wherein clients with minor illnesses have not declared their problems at the time of investing in a policy. This has backfired later with claims being denied by the insurance company. Declaring an illness or any health record, right at the beginning, makes issuance of policy and making claims easier.

While I hope that I have been able to clarify the first part, let me move on to the second.

At some point or another, we have all received calls from sales agents for insurance products. When we decide to buy one, the agent only asks us to sign the form and mentions that he will fill in the rest.

It is here that we need to spend that extra minute of caution and go through the requirements of the form and fill it to the best of our knowledge.

It is your responsibility to ensure that the policy that you have bought for the benefit of your family will really benefit the family. You need to ensure that every detail in the policy form is filled to your satisfaction before you sign on the dotted line.  Your safety is in your hands and a simple act of caution can marginalise your error and save you from a lot of unwanted disturbance later.

Whilst the above has been written keeping life insurance in mind, the rules are equally applicable for health insurance. Bad actors may exist on both sides of the table, however, it is our sound judgement to ensure that we leave no valid reason on the table for the insurance company to deny our claim in the future.

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