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Ask Mint Money | Pre-existing conditions need to be mentioned when buying plan

Ask Mint Money | Pre-existing conditions need to be mentioned when buying plan
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First Published: Tue, Jan 25 2011. 09 03 PM IST
Updated: Tue, Jan 25 2011. 09 03 PM IST
My father is 56 years old and suffering from diabetes (type 2) and hypertension. He has opted for a life insurance policy for which the premium is Rs 19,800 per annum for a sum assured of Rs 3 lakh. The agent said because he is a platinum club agent, the company is offering a special scheme under which no medical health check-up is required at the time of enrolment. I noticed later in the application form that the column on high blood sugar and blood pressure was not ticked. The agent said he had mentioned about diabetes in the underwriting letter. Although he has assured on the claim settlement, I have my doubts. Should the policy be discontinued?
—Ashish Agarwal
I am afraid that your father has been mis-sold a policy by an unscrupulous agent who has wrongly filled incomplete details in the proposal form. It is imperative to declare all pre-existing conditions in the proposal form itself as the proposal form is considered the basis of the insurance contract and all information has to be disclosed in it. In your father’s case, a claim can be repudiated by the insurance company since his pre-existing conditions have not been declared on the proposal form.
I would suggest that you seek remedial action from the insurance company by approaching them with the facts of the case. If the policy has been bought in the last 15 days, you could go in for a free-look cancellation. If not, you can approach the company for redressal. It is very important to fill the proposal form yourself while buying an insurance policy to avoid these situations.
I am 31 years old and have shortlisted two term insurance plans. The first plan assures Rs 50 lakh for an annual premium of Rs 14,000 over 30 years. The second plan assures the same amount for a premium of Rs 8,600 for the same period. However, the second plan limits the sum assured on riders to Rs 10 lakh, whereas the first plan offers riders up to the basic sum assured. Which one should I choose?
—Kishore
In your situation, given the difference in premium for the same base sum assured, it would be more beneficial for you to buy the cheaper policy. If the rider coverage is very important to you, then you can buy it separately and in all probability still pay less premium than the more expensive policy. You must assess your rider coverage based on individual needs.
Queries and views at mintmoney@livemint.com
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First Published: Tue, Jan 25 2011. 09 03 PM IST