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Sunday, June 2, 2013

PITFALLS OF BUYING INSURANCE


                                     
 The theory of "UTMOST GOOD FAITH" is vital in the insurance business.
 Under this theory, it is the duty of the customer to make disclosures about his health and his family member's health, etc. It is utmost important for you to reveal the diseases from which you are suffering or from which your family members suffered. There is one crucial question in the questionnaire of some insurance companies asking the details of sick leave availed by you. Please always give correct information. One of our colleagues posted at Motihari was sick. However, her agent informed the insurance company that she did not avail any sick leave. Agents often take your signature on the blank form and fill later on what suits them. After her unfortunate death, the insurance company asked the bank about sick leave availed by her, obtained necessary information and rejected the death claim on the ground of concealment of the fact and also forfeited the premium amount deposited by her.
Please note the travesty. The Insurance Company is not supposed to check any information supplied by you while selling insurance. They will happily accept the premium amount. But their surveyors will examine the information provided by you in the application form with the highest power microscope to find any small anomaly with sole motive to reject the death claim and  forfeit the premium deposited by you.
To make the matter worse, some insurance agents will advise you to hide that information which will hinder underwriters of the insurance companies to accept your proposal. The sole motto of such agents is to earn big commission paid by the insurance companies during first few years. If later on your family members are bereaved from the claim amount, it will not bother them at all.
 There are rumors that some insurance agents change the application form submitted by you to get the insurance proposal accepted by the underwriters. Please don't forget to check the photocopy of the application form annexed with the policy bond as soon as you receive it.  If you find any foul play,  please immediately take up the matter with the insurance company and with appropriate authorities.
 I myself became a victim of such malpracticeBut I could not complain since I had not taken receipt while submitting the application form. Therefore I was not having sufficient proof. The travesty was that the concerned agent was son of  my good colleague. I simply didn't pay any further premium.
 Since paying any further premium was of no use. The policy bond was issued on the basis of false information. My  family members would not get even a single penny in  case some untowards had happened to me.

However insurance is the need of hour. Everybody must be insured sufficiently after giving full disclosures . One may also consider to buy a term insurance policy of a big amount at an early age when genral health of a person is  robust.  Thus there will not be any need to conceal diseases.The premium amount is also very small .
A good number of  Insurance Companies believe in giving a fair deal to their customers. You may compare claim settlement ratios of the different insurance companies. If claim settlement ratio of a company is high, it indicates its surveyors are not rejecting  claims on  filmsy grounds.

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