Once you decide to buy an insurance plan, the first step is to fill out the proposal form. A proposal form is a legal document that seeks relevant information from you so that the insurance company understands you well.
A proposal form in insurance is not just about giving out your details such as your name, age, gender and address. It seeks all the relevant information from you that helps the insurance company in underwriting. Underwriting is a process that financial companies use to assess your eligibility to receive their products.
In case of life insurance, for instance, the proposal form will ask for details including your age, income and occupation. These details are relevant because mentioning your age ascertains the premium you pay, and income ascertains the amount of insurance you can buy. The form will also ask for nominee details which is essential because you need to make sure that the benefit reaches the right hands.
Apart from all this, the proposal form will also ask you about your medical condition and any medical history. Typically, the insurer looks for ailments that may increase their risk. Also, depending on the level of cover you choose, you may be asked to go for medical check-ups.
The proposal form will also ask you about other life insurance policies that you hold and will have details of the policy that you are buying. This is a good time to understand your policy benefits, so we recommend you fill up the form yourself.