Consequences of Declaring Wrong Information While Taking Insurance Policy
Insurance policy is an important matter that should never be taken lightly. After all, it is a matter of financial security to yourself and to your loved ones. We often become careless when it comes to filling long and tedious forms and we rely on the agents to fill the information for us. If you don’t agree, then just look at yourself and your surroundings, you will get to know the real picture. How many times have you filled up the complete form for opening a fixed deposit account with the bank?
What we generally do?
What we do is, call the bank’s executive and ask him to fill the details. Luckily, we don’t ask him to sign on our behalf. Well, we repeat the same attitude with insurance agent as well. And why only we, even the insurance agents are a part of the show. “Sir/ Madam, you only sign, rest I will fill”, these words by the insurance agent relieves us of the torture of filling the form and we readily agrees to it. Take a pause and think for a moment, how is the insurance agent concerned about your well-being. It is only for the commission and nothing more than this. But it is your responsibility to put an extra endeavor and fill the things correctly and completely, which unfortunately we don’t do and this is the point from onwards we begin to lose the purpose for which an insurance cover is actually designed. An insurance agent being unaware of your habits and all details fills some of your personal details in the form as per his own belief. For example – there is a question “whether you smoke” and the insurance agent while filling the form ticks at ‘no’, but you are a smoker. And you have not even bothered to check the information before signing the form.
What is the basic reason for seeking an insurance cover?
Definitely, the reason number one will be tax benefits. Reason number two can either be your responsibility of financially securing your family in case of your death or else there can be no reason number two at all.
There can be any reason for taking up a policy, result will be same – financial security to your family after your death.
What insurance company asks for?
The form asks for your personal details like name, age, address, qualification and occupational details including income and your medical history. If you are planning to take the policy for your family members as well, then the details of your family members including their medical history also needs to be provided in the form.
Your medical history will have an impact on your premium details and your occupational details and income is asked by the insurance companies to ensure whether you will be able to pay the insurance premium or not.
Consequences of furnishing wrong/ inadequate information
A contract of insurance between the insurer and the insured is based on the precision of the information provided by the insured. Any misleading or wrong or inadequate information in the form can definitely have a favourable impact on your insurance premium but at the same time, it will reduce your chances of getting a claim, as and when it will become due.
At present, you will be able to save your tax liability by showing your payment proof towards insurance premium. But in future, in the event of your death, your family might have to suffer because of the incorrectness of the information filled in the form. Insurance company never undertakes any guarantee to underwrite the life of the insured based on the wrong or inadequate information.
And the worst part is, you cannot even fight for your claim on the premise that the insurance agent filled the form and you were not aware of the incorrectness of information. After all, you are the one who has signed the form and it is assumed that before signing you have ensured for its accuracy. You can not even argue that your insurance agent was aware of the things.
To reiterate, restrain yourself from furnishing wrong or inadequate information to the insurance company and ensure that you have met all formalities so as to avoid any sort of hassles for your family at the time of demanding claim.