Of late, people take life insurance policy according to the exact risk that they face in life. Sometimes, it does not happen the way it is expected. Moreover, when they die under different circumstances, the claim is not favourably processed in favour of the nominees. As a consequence of this, the surviving family is put to great hardship. The family would be in dire need of funds and they would be forced to suffer in future. Insurance companies may be technically correct in denying the compensation to the nominee due to certain glaring or factual errors of omission and commission in the proposal form. Hence, it is imperative that the proposal form is carefully read, filled and signed by the proposer so that there is no future complication whatsoever when it comes to claim processing.
What is the actual solution?:-
‘Honesty is the best policy’ – this adage should strictly be observed while taking a policy. One should be clear as to the reason of taking a policy and the long term aim of taking a policy. Again, while taking a policy, it is essential to give true and correct information as to one’s age, employment, income, nature of employment, health status, treatment of diseases, if any, health status of relatives, smoking/alcohol habit, if any, and also details of other policies, if already taken.
Sale of Policy:-
‘சிறிய படகில் தேவதையின் தேசத்திற்கு செல்கிறேன்’- மரணப்படுக்கையில் ஆசிரியை எழுதிய கடிதம்; மாணவர்கள் உருக்கம்
More often than not, the proposal form is practically filled by the agents with all good intentions to help the clients. In the process, some incorrect information is furnished in regard to the age, income, nature of employment, status of health, health of other family members and other policies etc. In the absence of correct inputs, sometimes, the forms carry certain assumed information leaving them to unwanted ambiguities.
In case the insured dies during the tenure of the policy, there is every likelihood for the claim to be rejected on grounds of false and incorrect information mentioned in the form.
What is the remedy?:-
The remedy lies in the hands of the insured only. Ideally, the form should be filled by the person who wants to take a policy so that all information pertaining to his/her age, employment details, other policies, health aspects and details of family members etc. can be correctly declared. For example, if a person (insured) who is in army and who is posted to the war front, should necessarily state the truth as it is. No questions will be raised except for the premium which will be little higher than normal rate due to war risk. The claim process will be smooth and successful. On the contrary if this information is not revealed or some false information is given, the claim will automatically be rejected on this ground.
The health status of the insured must be clearly and truthfully declared and so also the status of the relatives. In the event of death of the insured, all the information regarding the health status, disease suffered and the treatment given would be thoroughly examined. In case of any wrong or incorrect information given or any material fact is hidden, the insurance company would not entertain the claim at all. The death claim of the nominee will be rejected outright.
Proper knowledge of the policy before taking:
A proper and thorough knowledge of the policy should be obtained before taking a policy. It should not be taken randomly and without proper objective. If it is taken without knowing the features, the individual might suddenly lose the interest to continue the policy and fail to pay the premium. At that time, if any claim becomes inevitable, the insurance company will certainly reject the claim on account of lapse of policy caused by the insured.
Habit of smoking & alcohol:-
In case the insured is in the habit of smoking or taking alcohol, it must be clearly declared in the form. If it is hidden and when the insured dies, the circumstances leading to the death will be examined and in case it is proved that the death is due to smoking or drinking, the claim of the nominee will not be accepted at all.
Existence of other policies:-
‘Human Life Value’ is a common concept and assessment that every individual is entitled to. Based on this only, the insurance coverage value will be determined. Accordingly, if a person has already taken a policy or two, it must be duly furnished in the form so that the new insurance value will be accorded based on that. In the event of an individual hiding to reveal the existence of other policies, the death policy claim preferred by his/her nominee upon the death of the individual, will be rejected summarily.
The policy holder will get the original policy within a few days upon submission of document and payment of first premium. It is rather imperative on the part of the policy holder to check out the points mentioned in the original policy and satisfy. If there is any difference or contradiction between what was informed to him and what has been offered now, he/she can return the policy intact within the free-look period of fifteen days and get back the policy amount paid.
In the modern era, insurance has come to stay with many a variety as one could imagine and anticipate. It has a plethora of benefits to the users in every walk of life. It vests not only rights but also expects obligations from the user, the chief one being truthful in both letter and spirit. It is not only to the lawyer and the doctor but also the insurance provider that an individual should ever be honest and truthful so that the relationship would ever be mutually smooth and friction-free. No need to add that claims, if any, would be handled hassle-free.
(This article written in Tamil by Dr.K.Nellai Chander in Naanayam Vikatan magazine dated 22/4/18 has been transcreated in English by P.S.Ramamurthy)