Here are the consequences of inaccurate information furnished while applying for an insurance policy
Insurance is based on the accuracy of the information provided by the insured to the insurance company. In case of wrong information given in the documents, the chances of getting a claim are reduced. A life insurance company offers a policy on the basis of a proposal. This is the first step to get a policy. The form seeks basic information of the proposer and the life assured. This includes name, age, address, education and employment details of the proposer, and medical history of the life to be assured.
There are also questions pertaining to the health status of family members. The proposer and the life to be assured have to mention their incomes in the proposal form to satisfy the insurer about their ability to pay for the insurance, and the need for the insurance.
The proposal form also has questions pertaining to the existing insurance policies of both the proposer and the life assured from other life insurance companies. It is in the proposer's interest to provide accurate information to the life insurance company. The information is used by the insurance company to ascertain if a policy can be issued and the premium payable. Life insurance underwriters use the information regarding the health and family history of the life to be assured to arrive at the premium to be charged. The company gives a photocopy of the proposal form to the insured, along with the life insurance policy document.
Inaccurate information may go against the interests of the insured. His survivors will suffer, because they won't be able to get any claim from the insurance company because of such incorrect information. It is to be reiterated that an insurance application is a vital document. So, one should always provide accurate information and answers. Any wrong information or mistake can lead to rejection of coverage claim.
Life, income and health insurance policies also require one to inform the company about anything that may happen between completing the application and the insurance cover beginning. In case one does not comply, the policy can be treated as though it never existed and the company can refuse to consider a claim. When a policy is treated as though it never existed, it is called avoidance. If a policy is avoided, it can affect other claims that the person concerned might have made under the policy and the success of any future insurance applications.
One cannot take recourse to the fact that the agent was aware of the actual circumstances. The insurance company can avoid a policy and decline to consider the claim because the insured has to read the answers and sign a statement declaring all the information furnished is correct. So wrong/non-disclosures can have serious consequences on an insurance claim.
-----------------------------------------------------------------
Also, know how to buy mutual funds online:
Invest in DSP BlackRock Mutual Funds Online
Invest in Reliance Mutual Funds Online
Invest in HDFC Mutual Funds Online
Invest in Sundaram Mutual Funds Online
Invest in Birla Sunlife Mutual Funds Online
Invest in IDFC Mutual Funds Online
Invest in UTI Mutual Funds Online
Invest in SBI Mutual Funds Online
Invest in L&T Mutual Funds Online
Invest in Edelweiss Mutual Funds Online
