Picture a scenario where an individual suffers from a specific health condition and does not inform the insurance company about the same while purchasing a life insurance policy.
Due to increasing medical complications, the individual, unfortunately, passes away within the policy period. His nominee files the claim form, expecting the disbursal of the fixed sum assured amount.
However, upon investigating the reason for his death, the insurance company discovers that the deceased concealed information about his pre-existing ailment while buying the policy.
It then rejects the claim, leaving the nominee and other family members in a lurch at an already stressful time.
If you do not want your dependents and nominees to go through something similar, it is imperative that you disclose your health condition at the time of purchasing life insurance coverage.
What is life insurance?
It is an absolutely essential contingency plan that ensures the financial security of your family or dependents in your absence through the payment of a sum assured to your nominee upon your demise within the policy period in return for a premium.
So naturally, investing in the same will give you greater peace of mind, knowing that your family can take care of themselves financially even when you are not around.
First, however, let us come back to the reasons why disclosing existing health conditions is crucial at the time of purchasing life insurance. Here’s reading more about the same below.
Why You Should Disclose Your Existing Health Condition While Purchasing Life Insurance
If you already suffer from any illness or have a chronic health condition, then you should reveal it to your insurance company while buying the policy. Here are some key aspects worth noting in this regard.
- While filling up the application form, provide all medical details as asked for by the insurance company
- You may have to undergo a medical check-up as well
- The insurance company will use this information to evaluate the risk of insuring you and accordingly calculate the premium amount
- Your premium may be higher than what you would have to pay under non-disclosure of this information. However, you should still go ahead and reveal your medical condition to the insurance company since you do not want your nominees to face a situation where their claim is rejected.
- Most importantly, if you disclose your health condition, you will have to pay more for the same coverage or get a slightly lower sum assured However, it is always better than the entire claim being rejected in the future on the grounds of having deceived the insurance company by concealing information.
- Even if your intermediary suggests non-disclosure at the moment, you should not listen to such advice to purchase your life insurance policy swiftly
- Insurance contracts are made on the principle of good faith, i.e., where the insurer and insured both disclose all necessary information that directly affects the policy. Concealment of information amounts to deceit, and if the insurance company finds out later during the policy term as well, then it can terminate the policy on these grounds.
Now that the reasons for full disclosure of your medical condition to your insurance provider are clear, here are a few added aspects that might help.
What Else Should You Know?
There are a few other things that will be of help. First, you should go through the proposal form with care, aiming at understanding all the terms and conditions along with the type of medical details that you wish to provide.
You should also compare policies offered by various insurance companies in order to get the best possible premium. Finally, you should also purchase life insurance as early as possible in order to avoid paying more down the line.
Suppose you have concealed the information or missed out on it while buying the policy but wish to make amends. In this case, you can rectify the mistake in the free look period.
This is the duration of 15-30 days when you can return the policy if you are not happy with the same, along with getting a refund of your premium amount. Make the declaration regarding any pre-existing ailment within this period.
Then, the insurance company may give you a chance and underwrite the policy based on the applicable guidelines.
As can be seen, disclosing full medical information is a must while purchasing your life insurance policy. It will relieve stress since you can be assured of a hassle-free payout to your nominees in case of your demise within the policy period.
The scenario with which this article begins is something that everyone would like to avoid, and you are definitely no exception, right? So here’s to being honest and transparent with your personal details while applying for your insurance policy.