Filling The Insurance Form Right

While filling an insurance form is a tedious process, the task needs to be performed carefully with regard to stating your accurate details. Jay Sampat elaborates on the appropriate means of doing so.

Most people are reluctant about buying insurance because they either consider it unnecessary or the procedures too complicated. Anyone who has filled an insurance form will vouch for the fact that it is indeed a long and laborious process. Moreover, the insurance agent selling the policy is always so eager for you to sign on the dotted line that he/she simply fills the form in a tearing hurry and we sign off even without checking what the agent has written. 

What many of us don’t realise is that the insurance company accepts these details in good faith and hence utmost care needs to be taken with respect to providing the correct information. The insurance contract mentions that if there is misinformation of a fact that decides the pricing of your premium, the insurance company has the right to reject your claim. Hence, one needs to be actively involved in filling the insurance form. Following are some pointers in this direction:

1) Proof Of Income: If you are seeking a high sum insured or the maximum multiple on a ULIP policy (the multiple could be anything from 10), the insurance company has a right to know the applicant’s full income to evaluate his/her human life value. This is because insurance companies usually accept the sum insured as a multiple of the present income and this needs to fall in the specified range depending on your income and age. Under-declaring your income could result in the company declining the proposal for higher insurance.

2) Age Proof: If the correct age proof is not provided to the insurance company, it may consider raising the premium to accommodate the possibility of the applicant being older than the declared age. For most insurance companies, passport is the best document for photo identity, address proof and age proof. If you don’t have a passport it makes sense to provide the insurance company with photocopies of your birth certificate or school leaving certificate. Often, applicants may be tempted to give a self declaration in the absence of certificates. This can lead to a premium payable for an age five years older than that your actual age.

3) Past History Of Illness: Many applicants are reluctant to share such information. Moreover, agents often misguide proposers by asking them not to declare some past medical illnesses as it is likely to increase the premium. Holding back information is a strict ‘no-no’. If a claim has arisen out of any pre-existing condition not disclosed in the proposal form, the insurer has a valid reason to reject it.

4) Type of Work: The insurance company needs to know your occupation in order to assess the risk associated with your profession to calculate the mortality charges. It is therefore advisable to state your exact designation and nature of work. For instance, when you mention your occupation as an engineer, the underwriter wants to know if you are a site engineer or a software engineer. Specifying your exact nature of work reduces higher premium due to discrepancies associated with your occupation.

5) Details About Your Parents: If your parents are living, it works in your favour as the family is seen enjoying higher life expectancy with good health. It also makes a stronger case if you are seeking insurance at a higher age.

6) Other Life Insurance Policies You Possess: Give details of the cover you enjoy under those policies along with the policy numbers, name of the insurer, sum assured and the date on which the policy started. If you have bought a policy from the same insurer at a standard rate in the recent past, you may get a favourable rate in your new policy. 

7) Reasons For Insurance: If you don’t have any insurance and are going in for a large sum assured due to a fresh home loan, mention it. Wedding, child birth and aged parents are some other valid grounds for taking a high cover.

8) A Register Of All Your Policies: Most individuals have more than one life insurance policy. Over an extended period of time, it becomes difficult to remember or track investment details like maturity date, maturity value and fund value. It is for this reason that you should maintain a logbook with all your policy details. It should be updated periodically and accessible to your nominee.

9) Inform your near and dear ones as soon as the policy is bought. If your spouse and/or parents know that you have a life insurance cover wherein they are nominees, they should be aware of it in order to know what needs to be done in your absence.