Who Should Fill Insurance Application Forms ?

One of my clients Prabhu (name changed) called me over the weekend to understand whether I being his financial planner, could fill in his life insurance application forms for him.

While I had to convince him that I would like to do something better, his next question left me breathless.

It was “Why can’t the life insurance agent fill my form when he is earning on the commission through me”. The rest of his weekend was bad, I can tell you. I had to principle him life a school teacher about the importance of this subject.

Let us try to understand the importance of the data in the life and health insurance application forms and then you can decide for yourself who should be jotting this down in black and white.

Sample questions in insurance application form

While the health insurance application form asks health related questions, the life insurance forms demand a lot more.

Some of the questions could be like the below.

1. Are you receiving any medical attention currently ?
2. Have you ever been identified with congenital anomalies ?
3. Have you ever had any persistent fever, swollen glands or unexplained infections in the last one year ?
4. Do you have physical deformity, mental illness, deafness etc etc.
5. If you ever suffered from cancer, hypertension, blood pressure, diabetes, any respiratory disorder etc etc ?
6. Have you ever suffered from HIV, AIDS, epilepsy etc etc ?
7. Any disease not mentioned above ?
8. Have you ever remained absent from work or were admitted in the hospital in the last 2-3 years due to any illness ?
9. Give the family history of the life to be insured – their full details like age and state of health.
10. Has anyone from your family suffered or died due to any heart disease, stroke, high blood pressure, diabetes, cancer, paralysis, TB, hepatitis, AIDS etc etc.
11. Provide your lifestyle details – how much you drink and how much you smoke.
12. Provide all the details of the current life insurance policies you have.

These are just some of the questions in insurance application form, I am highlighting here. The full form can easily run to 4-8 pages and the information asked is very personal to you and your family.

Run through the questions and assess whether your agent or advisor is capable of writing does n the answers correctly while you sit back and answer them. What if he makes a mistake – do you review the form after he has filled in or you only go ahead and sign on the dotted line ?

If you review, the amount of time it takes to review is only slightly less than the amount of time it could take to fill in the form so why leave it to the agent to fill it in.

So who should actually fill the insurance application form if the advisor is not meant to do it ? It’s YOU, the life insured or the proposer of the policy who should be filling in the form in your own had writing. Not anyone else.

Why is this important?

Insurance is given on the act of good faith. The insurer accesses the risk of proving you with an insurance cover based on the data that you provide to them and in cases where life insurance is taken, extra medical tests if applicable.

So this data needs to be bang on. Depending on other people to fill in the insurance application forms can lead to errors and mistakes being introduced by the other party.

Remember that partial or wrong disclosures of material facts like age, income, existing insurance policies, existing illnesses or other important things can lead to claim rejection.

While stating all of the relevant information is very critical, it is equally critical to state all the information CORRECTLY. You need to understand that the insurance policy is driven by underwriting principles based on the information you are providing to the insurance company.

If you look at above questions, you will realise that these cannot be played around with. If you make a mistake and the insuance company can prove that the data provided was incorrect, the insurance claim can be rejected.

The probability that someone else enters data incorrectly is very high. And the advisor might be wanting to rush through the paperwork to convert you, the ‘lead’, into a ‘conversion’. And not to mention his commissions that come from the cheque that you pay.

So putting the onus of filling up the form correctly on the insurance agent is your blunder and you will suffer in the long run. For all you know, by the time your claim is rejected in the future, the agent would have long gone.

Last Word

Fill the insurance application form yourself and provide additional documentation if you want to put the ball in the insurer’s court. Let the insurer decide whether to give you insurance or reject it.

When the policy is issued, use the look up period to make sure that the form has the right information (a xerox of the original form is usually attached with the policy). If you find anything wrong, have it corrected.

You can still make changes to the policy data later on but the insurer will do the under-writing again which can lead to either a jacked up premium, or a complete rejection or no changes. It is wise to do that than to have a insurance policy which is based on wrong data and which will lead to rejections when you need the money most !

In a nutshell, here is a piece of paper that asks data about YOU and YOUR FAMILY and you are expecting someone else to fill that for you ? Sure it can be done no doubt, but who can do the filing of   more accurately?

It data about YOU and it can only be filled accurately by YOU. Period.