False information in your policy may cost more than you can imagine

Every bread winner keeps some funds from his monthly savings to invest in the premiums of a policy that would help him provide for his beloved family even when he is gone. However, what happens when the family approaches an insurance company after the demise of the bread winner only to find out that the insurance company rejected the claim stating false information.

The insurance company claims that the deceased was a chain smoker, yet the signed documents provided incorrect information stating that the deceased was not. In fact they even have proof that the very cause of death was smoking and hence the insurance company takes a stand and refuses to go ahead with the claim. Now what?

Apologies for the grim example, but this happens to many families in real life and the horror of the example is nothing compared to the devastation the bereaved family goes through. But how did this happen? How could the insurance company heartlessly rob a family of their rightfully-deserved compensation? What if this was your insurance policy?

The Devil is in the details and this is very apt in this case. Recollect the instance when you applied for the policy and everything was in a hurry – the agent walked you over the plan via phone, you liked it and called him at your office to collect the relevant documents. Understanding your lack of time, the agent gets your signatures and volunteers to fill up the rest of the information himself. Intending the best for you, he ticks non-smoker in the forms and passes it on.

A higher risk profile means higher premiums, and the insurance company will always cite that you misrepresented information to pay less for the policy and hence have every right to reject the claim. After all, why would they cover a high risk person for a normal premium?

For this reason, always ensure that you provide complete and true information while filling up your policy documents even if it means a slightly higher premium for your policy. Things like age, existing/previous medical conditions, family medical history, lifestyle pattern etc should be declared, so that the insurance company can accordingly profile you into the right risk category. This will ensure that the insurance company has no grounds to reject your claim and will provide your family the policy cover when they need it the most.

Best Viewed in - 1024 x 768 and above resolution, IE7 & above, & other popular browsers
Copyright © 2011 Flame. All rights Reserved