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Dos and Don'ts while buying life insurance

Read onn to know the do's and dont's of buying life insurance.

Apnainsurance.com Research Bureau

20 Dec 2007

  • Assess your life insurance requirements.
  • Research on various types of life insurance plans, additional benefits, or riders. Also ensure that you compare similar plans across the various insurance companies.
  • Understand the extent of life insurance cover, the exclusions for the insurance plan, AND the riders that you select.
  • Fill the insurance proposal form yourself.
  • DO NOT provide your agent with a signed, blank form.
  • Be truthful when filling the form as you or your nominee could lose the benefits from the policy in case you misrepresent facts.

Do not misrepresent any facts - be it regarding your age, health, family history, etc. Never alter medical facts as it can make the entire policy null and void. Your insurance agent might advise you to misrepresent medical facts to help reduce your premium cost. This is not a smart thing to do - in the event of a claim, more often than not, the misrepresented facts will come up and go against your family.

Let us look at an example that can very easily happen to any one of us: Suppose you conceal the fact that you are a diabetic when you fill your insurance form. After a while, you undergo heart surgery and choose to make a claim under your critical illness rider. The first thing the insurance company will do is ask for your medical records from your doctor/surgeon - only to find out that you had diabetes AT the time of purchasing the insurance policy. The company will refuse to make any payments towards your claim even if the two diseases are unrelated. This is for a critical illness rider where the cost of the rider does not even exceed 30 per cent of the total premium cost. Now, imagine in case of your death - your premium payments become a total waste. More importantly, your family will not receive any proceeds from the policy.

See also:

What is the process to get a life insurance policy?