Help filling out my critical illness insurance proposal form ?
The starting-point for a critical illness insurance contract is a proposal form. The policy in itself is the expression of a contract between the purchaser of the policy and the company. This contract is based on the information given in the proposal form, and if this information is later proved to be false the company will be within its legal rights in repudiating the contract or reducing the benefits payable. It is important, therefore, to answer all questions on the proposal form as accurately as possible.
Apart from annuities, where quotations are based on age attained, most critical illness insurance policies are issued on the basis of age next birthday. In other words, the premium rate applicable depends on different conditions. (Exceptions may be made if the last birthday is very recent. In this case, the policy may be “backdated” by the payment of a premium for the year just past, and the premium rate will then be that applicable to the age at this last birthday.) A false statement of age upsets the company’s carefully calculated estimates of mortality and claims. If age is understated, it means the company is getting less in premiums than it needs to build up reserves for future claims. An incorrect statement of age on a proposal form will often come to light when a claim is made, for some companies require proof of age at this time. This is more likely to be the case where there is a death claim and the age on the death certificate does not match that in the policy.
Critical illness insurance policies fall outside those provisions of the Unfair Contract Terms Act 1978 which relate to “avoidance of liability”. However, concerned offices have come to an agreement with the Department of Trade that they will include in their proposal forms a warning of the consequences of non-disclosure. As already noted, if material facts (normally health or occupational risk) are not disclosed, the office will be within its rights in refusing to meet a claim or in reducing the benefits payable.
Tags: critical illness, critical illness cover, critical illness insurance