When applying for a life insurance protection, your insurance company will ask you to complete a proposal or application form. This is a simple form that asks you a number of questions to enable the company know you better.
The form aims to elicit your personal details such as name, address, date of birth, occupation etc. It also contains questions relating to your state of health, habits, the type of life insurance cover you want, details of your beneficiary(ies), how you want to pay your premium etc.
At the base of the form is an Undertaking/Declaration for you to sign. By signing it, you are declaring that the information you have given are true and complete to the best of your knowledge. In other words, you’re giving the assurance that you have told the truth in the form.
The Declaration also warns you that the proposal form and the disclosure you have made form the basis of the contract between you and the insurance company. This needs to be emphasized.
In agreeing to grant you a life insurance cover, the insurance company relies on the information you have provided in the proposal form. There is no way the company can know you properly without obtaining necessary information from you. If you then supply wrong information, the company would be misled into granting you a life insurance cover.
It is therefore very important that you study your life insurance proposal form carefully and provide accurate information.
Should it be discovered later that you have supplied false information; the insurance company could decide to reject any claim that may arise under your life insurance policy.
If, in the process of completing your proposal/application for life insurance, you find it difficult to understand certain questions, ASK!
There is no crime in asking for clarifications before answering any question, and I’m sure your life insurance agent will be ready to assist. It is better to do this than for a claim under your valuable life insurance policy to be rejected later in the future – a time you may no longer be around to put up any resistance. Think about how dejected and disappointed your beneficiary(ies) would be at that point!
Honestly is crucial in the completion of a life insurance proposal form, or any insurance form for that matter.