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Never sign your insurance application blindly, may face problems realising claims
financial Ecpress, February 8, 2019

An insurance policy provides you peace of mind under adverse situations by providing you and your loved ones financial support in adverse situations. However, your adversities may compound if your insurance company were to reject your claim due to the contents of the application form you had filed while buying your policy.

You may face such serious situations especially if you sign the application blindly without reading the policy fine print – or worse, if you allow someone else to fill up your form.

Knowing what’s covered

An average person requires various forms of insurance to cover a broad range of risks. For example, to ensure financial safety of your family against your death risk, you need a life insurance policy. To meet the high costs of hospitalization, you need health insurance. Therefore, it’s important you know if your risks are covered by the policy you’re buying. If you blindly pick a policy without knowing of its benefits, inclusions, and exclusions, you’re risking claim rejection. The insurance marketplace has a wide variety of options, and each product is created differently with its own distinctive features and limitations.

Making correct declarations

Insurance application requires every detail to be mentioned correctly. It’s common to share information like age, gender, health condition, smoking habits, pre-existing diseases, past claims etc. in your form. If you provide incorrect information about yourself, you may have problems making claims. For example, if you fail to declare you’re a smoker and later seek hospitalisation for an ailment caused by tobacco, you may experience problems making your claim.

Read and enquire

When you have the policy application in your hand, ensure that you’ve read it carefully. Ideally, you should also read the product brochure of the policy you’re buying because your family’s finances will depend on this policy. Often, insurance salesmen provide you the form and indicate where you need to sign. You get the feeling that you’re being rushed through the purchase process. Some salesmen may even tell you to just sign and leave the rest of the form filling to them. This is dangerous. Ensure you’ve filled the form yourself. If you’re in doubt about any feature, ask questions. Sign only once you’re convinced that the product is the right one for you.

What should you check for?

The policy fine print will consist of critical information on the extent of the cover. For example, the policy may list the illnesses for which day-care treatment is covered, or the waiting period for the treatment of another list of illnesses, or a list of diseases that the policy will not cover. Also, exclusions can be temporary or permanent.

Next, you should check the sub-limits – caps on coverage – on the treatment of certain disease, room rent, etc. There’s also the matter of pre-and post-hospitalisation costs. Sub-limits and pre/post-hospitalisation costs vary from one policy to another. But reading the brochure and application will help you be clear on whether the coverage is enough for you or not. Insufficient coverage may lead you to having to part-pay hospitalisation costs from your own pocket.

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