I have heard a lot of people shying away from taking a term policy as it mandates a compulsory medical checkup. If you are looking to buy a life insurance policy, do get all the medical tests done and disclose everything known regarding pre-existing disease or family medical background. In most cases the cost of the medical tests are borne by the insurer & once done the onus of disclosing pre-existing medical conditions shifts to the insurer from the insured. Unintentionally in a lot cases one may not be aware of a medical condition present & may thus overlook it due to which the claim gets cancelled later. Also do ensure & review that correct & complete information is given in your proposal form.
The probability of claims getting rejected is higher if incorrect or incomplete or concealed information gets submitted to the insurance company in the proposal form. One must remember that a term or life insurance plan is going to be issued on the information provided in the proposal form and it will form part of the contract. Filling up wrong information intentionally or unintentionally can be a cause for claim rejection.
Pay special attention to sections related to lifestyle, medical and family history. Health & lifestyle disclosures especially smoking and alcohol-related questions are common & must be addressed properly. For example in case you consume cigarettes occasionally, you cannot declare yourself as a non-smoker in the proposal form. Hiding wrong deeds like smoking or alcohol consumption just to pay a low premium will definitely lead to a claim rejection. Hiding any medical history with the fear of the policy getting rejected can also be a cause for claim rejection.
Disclosing pre-existing disease plays a significant role when a customer wishes to attach some health-related riders/add-ons, like critical illness rider, with the basic term or life insurance plan. Being a health-related cover, it is very important to disclose any pre-existing condition. Thus it is always advisable to get medical tests done to stay on the safe side.
Additionally one should also not delay in filing claims as delay in filing the claim beyond a stipulated period could raise unnecessary suspicion & prolong investigations.
Lastly you must always pay your premiums on time to keep your policy in force. An insurer will reject your claim if your policy has lapsed due to non-payment of premiums. If a claim is made even a day after the policy lapses, the insurance company will reject the claim.
Sabyasachi Paul has been associated with equity research and advisory on equity markets in India for over 10 years & currently heads the equity research desk of Eastern Financiers Ltd, Kolkata. He also manages a portfolio on the online platform Kristal. Find link to the strategy named ‘The Tortoise’