Page 141 - Ebook health insurance IC27

Sashi Publications

buys an Insurance Policy, it means that he is signing a contract with the
Insurance Company to cover his illness based on a mutual consent, which
comes in the form of a proposal by the customer and its subsequent acceptance
by the insurer.
Q2. State the differences between insurance and other contracts.
Ans. There are some basic differences between Insurance Contract and Other Contracts.
(i) In case of an Insurance Contract, the customer normally does not have much say
other than accepting most of the conditions of the product. Sometimes, even the
conditions are written in difficult, legal languages, he has to depend on the Insurer
for any clarification or explanation. Similarly an Insurer covers the risk without
knowing much about it , based on Laws of Probability, Laws of Large Numbers
and other principles of Insurance.
(ii) The customer may never see the copy of the contract till he receives the policy
(though the content is similar to the content of the prospectus ).
(iii) While the other forms of Contract follows ' Caveat Emptor', i.e ' Let the Buyer
Beware', the rule stands modified in Insurance Contracts by the principle of '
Utmost Good Faith' from both the sides.
(Please refer to differences mentioned in notes)

Q3. What details of the applicant is usually sought in the proposal form ?
Ans. The application form consists of 2 main parts:
(A) Details of applicant - this comprises of :

(i) Name, with father's/husband's name.
(ii) Date of Birth.
(iii) Sex.
(iv) Age (in completed years).
(v) Occupation.

Website : www.bimabazaar.com, PH: 033 22184184/40078428 145