Page 120 - Ebook health insurance IC27

The Insurance Times

Why more information is sought in insurance proposal form
 Insurance is a contract of Utmost Good Faith. Usually the insurer issues the policy

based on the information supplied by the insured. If the information is incorrect
the underwriting may also be incorrect and there may be problem at the time of
claim.
 The standard premium tables of insurance companies are designed on the basis of
age and other related factors. The information in the proposal form is the insurer to
decide about the actual premium.
 Since the chances of moral hazard is very high in health insurance policies insurance
companies try to get the maximum information possible so that data can be correlated
by the experts and arrive at the decision to grant cover or loading to apply.
 Occupation of the customer helps to forecast any occupational hazards.
 Details of past diseases also help to understand the health status and help to estimate
the severity of diseases, scope of treatment in future, incidence of such treatment
that may recur in near future and estimate the approximate cost of such treatment.
 In floater policies all the members are covered in a single policy. The data of the
family member helps to understand possibility of heredity diseases in the family.
 Medical examination is insisted after 45 or 50 years since the chances of suffering
from disease increases.

Self declaration of health status:
 Every prospective insured must declare the current health status. Sometimes the

insured may knowingly or unknowingly fail to disclose existence of any disease. So
the insurers give a list of diseases which the prospect may have suffered in past or is
currently suffering.
 It helps the insurer to decide about granting the cover

124 Guide for Health Insurance