Insurance proposal form: How will dispensing with physical signatures till March 31 help customers?
Now the customers can buy all life insurance proposal form online through digital signatures or OTP-based registrations for ease of purchases.
According to the Turtlemint co-founder, some of the benefits of the new IRDAI decisions for customers are:
This proposal form comes in different shapes and sizes. In many insurances, it is paper-based & needs to be filled by hand. Sometimes.
The information can be provided electronically & in a few cases such as motor insurance, the proposal form may not even be required.
The form is important, obviously because that’s where you provide information that is the basis of your insurance. But equally valuable is the fact that completing a proposal form requires putting pen to paper or fingers to keyboard.
Specifically the features they get and the claims that will get paid. In filling up a proposal form you should be accurate. The most basic information asked is your contact detail.
Crores of claims & maturity amounts remain unpaid because insurers are unable to reach policyholders at the numbers and addresses they gave.
Do ensure that the address you give is permanent & the phone number is one that you intend to keep and the email is personal. People change jobs more often than they expect.
Provide the information asked and not more. Be to the point. There is little benefit in giving additional information. You will find those damages excluded from your renewed insurance.
There have been situation in the health insurance for example, where the applicants opened up about feeling anxious & had their applications declined.
Complete the form yourself.
All too often applicants will sign a blank proposal form & have an adviser do the rest.
That’s a recipe for disaster. It is not that the adviser will deliberately mis-state facts but there may be information the advisers just do not know & in their wisdom & leave out things they consider unimportant.
When insurers send back a copy of the completed proposal form. Information may be altered by someone in the distribution chain and it is good to look for such inconsistencies.
life insurance, in particular, the nominee section in the proposal form is key. The benefits of a life insurance policy were paid to the legal heirs with the nominee & being a temporary custodian of the money.
The new insurance Act, if the nominees you select in the proposal form are legal heirs & the entire benefit will be paid to them in the proportion you specify.
This gives you much better control over directing who should benefit from your insurance.
Requirements needs Specificity
In a good form all these questions should be specifically asked & to reduce the possibility of a claim being rejected. Health insurance has a similar need for specificity.
All health insurance forms have catch-all medical questions that require applicants to mention diseases they suffer from. Some insurers leave these broad.
For example, “Have you had any other illness other than mentioned in the questionnaire (other than common cold)?” or “Any additional facts which affect the insurance & should be disclosed to the insurer?”
These catch-all questions always leave applicants doubtful about what to declare. However, some catch-all questions are more specific.
For example, “Are you currently suffering from any symptom(s) or complaint(s) persisting from more than five consecutive days?”
The specific questions leave less scope for disputes and are better from the customer’s perspective.
Insurers should design their proposal forms to be brief, specific and educative.
In home insurance they range from 2 to 6 pages. In health, from 3 to 12. Lengthy forms have two problems. The formatting is poor making them cumbersome to fill.
It’s often not possible to write legibly in the form. You are never sure which information is mandatory & whether the fields you left out are the ones that will matter when you make a claim.
Finally, a good proposal form educates buyers about the insurance once more. It will tell buyers that in a home insurance there is a choice between reinstatement value.
Where cost of reconstruction is paid & market value there where depreciated value is paid. In motor insurance, it will clearly specify the add-ons & exclusions such as engine seizure.
In health insurance, it will remind the insured of the waiting periods for diseases. Buyers should take their time to fill this form. Remember, those who act in haste repent at leisure.