Girish is a diabetic for the past 10 years and has been taking insulin shots to keep it under control. While filling the proposal form he thought it would increase his premium for the insurance company would decline his proposal if he reveals that he is a diabetic patient. All the other details are mentioned and a declaration is made by him stating that all the facts have been declared.
One bad day while watching a cricket match he suffered a mild heart attack after which he was rushed to a nearby hospital. There he was placed in ICU and treated for the same. After discharge from the hospital, he approached the insurance company for the claim with all the relevant documents.
After scrutinizing the documents the claims department found that the cause of heart stroke was diabetes and the same was not declared in the proposal form. This led to the rejection of the claim by the insurance company. His greed to save few hundred bucks made him cough up a few Lacs to the hospital for treatment.
It is of utmost importance to declare any pre-existing diseases before taking the insurance.
Principle of Utmost Good Faith:
The principle of utmost good faith, uberrimae fidei, states that the proposer and insurer must disclose all the material facts before the inception of the policy. This principle applies to each and every insurance policy and there is no exemption for any policy from this rule.
It is the responsibility of the customer to declare all the material facts in the proposal form at the time of taking an insurance policy. The material facts are those which decide the acceptability of the proposal by the insurance company.
For example, in health insurance, any illness prior to the policy inception is considered a pre-existing illness and is to be declared in the proposal form.
What is a proposal form?
The importance of proposal form in insurance is a basic document required for any insurance. Insurance is a contract between the insured person and the insurance company. It includes the customer's basic information like address, age, name, education, occupation, health condition, etc.
The insurance company provides an insurance policy based on a proposal form. The proposal form is the most basic requirement of any insurance. It needs to be filled by the customer who may look for the assistance of an insurance advisor to fill it up.
This includes the name, age, address, education, and other details of the customer, and also other information like medical history, health status, etc. The proposal form helps the insurance company to calculate all the risks about the insurance policy and hence decide the premium amount.
What to declare in the proposal form?
The proposal form of insurance is a basic sheet that contains all the questions regarding the risk. These questions should be answered in good faith. The questions which affect the underwriting ability are below:
- Health insurance: Pre-existing diseases such as diabetes, BP, Thyroid, etc., previous treatment for any particular diseases, surgeries have undergone, etc.
- Motor insurance: Hiding previous claim history to claim No Claim Bonus, Insuring vehicle in the name other than the RC Copy.
- Life Insurance: Pre-existing diseases, surgeries have undergone, occupation, income proof, etc.,
When you buy a policy fill the health insurance proposal form correctly. It is the base of the insurance contract. Do not leave any column blank or do not sign in a blank proposal form.
You will be responsible for the information present in this document as it carries your signature. Read terms and conditions carefully before proceeding.
Visit PolicyBachat and get the best insurance quotes from the top general insurance companies and you can also check the details on risk factors terms conditions and please read the sales brochure carefully before concluding a sale. Need Help? call PolicyBachat at 1800-123-4006 or 1800-123-4003 and our insurance specialist will be there to assist you.