Not disclosing your old Insurance policy can lead to Claim Rejection
POSTED BY ON April 16, 2012 COMMENTS (417)
Everyone makes mistakes and are not aware about it ! . A lot of people who buy more than one insurance policies, do not declare about their existing policies to the new company. Some do this because they are not aware about this “compulsory” rule, but some do it intentionally! & there are some who do not pay much attention to it thinking that they will be able to “escape” it and fool the company. However, you should know that companies are very careful about the rules and regulations as mentioned in the policy and declaring your old Insurance policies is a mandatory and important rule. No matter how much your policy sum assured is for, even if its 1 lac, you have to declare it when you take a new life insurance policy (This means term plan, ULIPs with insurance cover, Traditional Policies) . For an example see how Debajyoti was confused on this non-declaration of old policies question and I told him how it was a very important thing to do.
Today, I am going to discuss a recent case I saw in Crime Petrol (a tv show showing real life cases, must watch) and it is an eye-opener for those how have not declared their existing insurance policies while taking a new life insurance policy. Because in this real life case, a guy family was rejected 1.25 crores of life insurance claim just because the guy did a small mistake, he never disclosed his old policies. Read on –
Real Life Story of Sandip from Gujarat
Sandip was in a lot of debt. His business was not doing well and he was very much worried about his family and what will happen to them. The only solution he could think of is Life Insurance money which they would get after his death, but his life insurance was very very small (few lacs). So he took around 1.25 crores worth of life insurance, thinking that after his death, their family would get all the money.
But there was an issue, a big-big issue. He could not commit suicide, as it was not covered for the first year and his life was becoming really hell and he didn’t want to live anymore. So the only solution was that he should be killed in an accident or some one murders him. He asked his friend to kill him in a way that no one comes to know about it and it looks like murder. This way, he would die and his family will get the life insurance money and his family would live happily.
His friend was scared to death to kill him and really was not able to do it as he was a good friend of Sandip, but finally he killed him on his request. Police came, verification was done and finally Police was able to crack the case and catch his friend. The family figured out about the insurance policy when Sandip’s wife saw the documents in an almirah . The family went to insurance company and asked for claim amount, but the insurance company pointed out the violation of terms and conditions and said that the claim will NOT be paid as there was violation of rules. Family freaked out and gave all sorts of reasons why they should get a claim , but rules and rules. The family filed a case against the insurance company in court, but that was of no use as the court also gave judgement in favour of insurance company.
The family never got any money. Here is the youtube episode of the Crime Petrol Story I was talking about for those who want to watch it
Have you declared your old policies to new insurance company?
You have probably done the same mistake. If you were holding any endowment/moneyback policy, ULIP, Term Plan or any kind of Life Insurance and then you took a new policy and didn’t declare all the old policies, then after your death, your family is not going to get any money! Please take it seriously.
So your action item is to check with your insurance company customer care about the declaration of old policies and incase you have not given that information at the time of taking the policy, better give them this information, because I don’t think you should be doing that big charity!
I have taken a term policy from Max Life recently for Rs.1 Crore.
My diabetic history was disclosed in the proposal. Though the
medical reports were normal, life insurance company charged me
50% extra premium based on my health declaration.
I have 2 personal accident policies and 2 mediclaim policies in my
name which I mentioned on my proposal form. How ever, I forgot
to give the details of 2 term polices which were lapsed in 2013.
Actually, those term polices were taken in 2011 but I discontinued
them due to the over charging of premium (on my health ground).
And I don’t have those policy details also. So I could not give the
details of those policies on proposal form.
Also I didn’t mentioned in the proposal form that I had been charged
with extra premium by other insurance companies earlier. However,
details of all current (existing) policies were given on the proposal.
In your expertise, should I ignore my new term policy and go for a
new term insurance plan to avoid any complications due to
concealment of fact and insurability.? Will my nominee face any
problem in case of a claim, since I didn’t mentioned the details of
expired policies.?
Will this issue be treated as a very serious offense even after paying
the premium for 3 years.?
Dont worry . You have to only mention the active policies !
Hi Manish,
1. What are the reasons companies ask these data of previous policies?
2. What is the main reason companies reveal behind rejecting the claim on the ground of non-disclosure of previous policies?
3. By rule I take 3rd policy I declare about precious 2 policies. Whether I have to inform first 2 also about my 3rd policy?
Thanks.
1. Because one should not take life insurance more than what they deserve. So they need to understand how much life insurance you already have !
2. Same as 1
3. No
dear sir,
while applying for new life insurance plan,insurance company is asking about existing health insurance details also,
in life insurance application, why health ins details ?
and should we mention group health insurace from employer(every month some amount is debiting from my salary)
& should we mention contract closed general insurance polices like health,,,,PA,,,,,Critical care insurance,,,bike/car insurance ,,,,,from my own pocket paying (due to one year agreement completed and didn’t do any renewal),
&
if we dont mention health ins details (inforce&lapsed) in life insurance application ,will insurance company will reject the claim,
please confirm
Really ? I dnt think a company asks for health insurance policies, It does not make sense. You dont need to mention that !
hello good evening,
i have seen following sentence in one of leading insurance company application,,,,,,
“” Details of life insurance / medicliam / health / personal accident policies of the life assured held / applied with
**** company / other companies “”
My concern is now i am going to take term plan , please clarify we have to declare this all things,,,,,,,or only life insurance details required
Yes, if its already mentioned , then you have to declare that
dear sir,
while applying for new life insurance plan,
1) should we mention contract closed life insurance polices (due to lapsed , contract closed by insurance company)
2) lapsed life insurance policy details
Unless its specifically asked, you dont need to tell
Hi Manish,
The post is really helpful. I have one doubt, Is it compulsory to provide the details of insurance provided by my employer also while filling the term plan application?
Thank you
No, You only have to provide the details of policies for which you are paying the premium from your own pocket!
Thank you Sir
Hi,
I have not declared my previous policy details while applying for PM Jeevan Jyoti Beema Yojna because there was no such information sought in the application form. What will be its impact at the time of claim settlement.
Incase its not asked, then you dont have to mention it anywhere !
Hi Manish,
Query regarding Health Insurance. My mother had a claim previously rejected on account of non-disclosure of preexisting ailments. She got influenced by agent to not mention any during the proposal and to refuse the existence of any such ailment when and if actually detected. That, obviously, backfired big time. We have since let that policy lapse instead of continuing it.
Now, if I were to apply for a new policy on her behalf, disclose all necessary facts including the aforementioned rejection, then how likely is the new insurer to reject the proposal? I was going through the proposal form for a new prospective insurer and noticed a section to that asks to mention any previous claim rejections/approvals apart from preexisting ailments.
Thanks.
Sorabh
While they might not reject the policy itself, they might include a big waiting period for the illness like 3-4 yrs, or if your mother is above 60 yrs, there is a good chance they might never cover that particular illness.
Manish
Thanks Manish.
What would you suggest in such a situation? Come clean or keep the old rejection scenario under wraps and risk discovery?
The reason I ask while I’m fine disclosing preexisting ailments, a complete exclusion would prove be a big detriment.
No game here. I want something that works when things go south. The last claim rejection had me crippled financially. If anything, I understand the value of insurance better than ever.
The mentality was psychological erstwhile. The lackadaisical approach cost me dearly. I wouldn’t want a repeat of the same incident.
There’s already an insurance in place for my mother that’s provided by employer, no questions asked. I wanted to keep another just in case. I hadn’t opted for the group policy earlier when the old one got rejected. I guess you can gauge how laid back I was about having a health insurance back then.
I’m all for coming clear this time around. Just wanted an opinion that’s all. I’ll follow up on that link soon.
Thanks for the advice. 🙂
Hi, Do I need to disclose Mortgage based life insurance as well while taking a term plan?
any life insurance which is taken by you and you are paying premium has to be disclosed !
I took term plan from tata aia (SA 50 lakh).I have disclosed previous policies but forgot to disclose pradhan mantri jeevan beema yojna(SA 2 lakh) & hdfc cancer care plan(SA10 lakh) premium rs. 2382. Is it necessary to disclose these policies.
please help .
YEs, you should have disclosed the first one . NOt the cancer plan !
I took term plan from tataaia (SA 50 lakh).I have disclosed previous policies but forgot to disclose pradhan mantri jeevan beema yojna(2 lakh) & hdfc cancer care (10 lakh premium( rs. 2382). Is it necessary to disclose these policies.
please help .
Hi Manish,
I am taking eTerm insurance from LIC. I have declared my Bajaj Allianz life insurance with them. I am wondering if I need to declare my Pension Plan (from ICICI prulife) also with them? The Pension plan has a sum assured of 2.5 Lakhs. Do you think I missed declaring it? If so, how is possible to get it added to the policy? I am yet to receive my policy document from LIC.
Regards,
Madan
Yes, if your pension plan has the life insurance component, then you should declare it. Just email the customer care about it and ask for the confirmation that its added to your details or not.
Manish
Hi mohit :: i have old policies but not paying thier premium since 2 years and thease are lapsed … So should i disclose them in new policy or not required
If its asked to provide lapsed policies, then mention it . else not
Manish, I am part of group insurance policy bought by my employer for all the employees. Do I need to declare that as well?
Only if you are paying the premium. Else not
Thanks! And, what about PMJJBY?
Its not insurance policy. So why will you declare it ?
Manish, it is an insurance policy: http://www.jansuraksha.gov.in/files/pmjjby/ENGLISH/Rules.pdf
Er… I confused it with Jan Dhan … Yes, if its life insurance policy, then you should mention about it if you are paying the premium
Thanks!
No group insurance provided by employer is not to be mentioned
Manish
Dear sir, i am planning to buy hdfc term plan for 15 years. now my real problem is that i dont have details of my older
policy details as all were done by my father. i do not have any details regarding my life insurance policies. what can i do?
what should be the solution for this?
Find them
You cant say you dont know about it .
Hi,
I bought two term policies at the same time for 50Lacs each. I did not have any other policy before it. So i have not disclosed anything. Should i update this information now with both the insurers?
Thanks, Akhil
Generally insurers have a column asking if you have applied for any more term insurance side by side . You must have said YES there.
Hello Manish,
As per the latest amendment to Insurance Act, an insurer cannot deny claim after 3 years of policy commencement.
Does it mean any policy older than 3 years can never be rejected for a claim? That is a big relief for genuine customers but is that really going to work?
Rohit
I dont think its still true. The amendment must be only for immaterial facts. I mean only for those things which cant influence premiums. If someone has actually cheated the insurance company on medical history , then claim will be rejected.
If you honestly buy the insurance, then no way insurance company will deny or can deny it
Manish
Hi Manish,
I took a term policy from icici and there are few other policies from hdfc and lic taken 5-6yrs ago.
At that time I never used to smoke or drink.
But now I do.
Do I need any voluntary disclosure?
What hapens if someone,at time of taking policy doesnt smoke but after few yrs he starts?
And suppose now if I take a fresh policy and disclose abt.My smoking, then wouldn’t it conflict with the previous data?
Pls help.
What matter is the info given at the time of taking the policy. So because you are taking a new policy, you must share about your smoking right now. But for old policy, there is no need to update them !
I tried to buy online icicipru term plan earlier than i filled details of old policy column,but now they had removed that column from application form & also they are not providing sufficient space to answer all questions in health details & been advised to send a separate mail with details of answers & old policy history … on confirming they told me that this mail won;t be a part of policy document received post approval.. so please suggest me should i buy their policy or not & it’s urgent as i want to buy policy before my DOB 31/7/1979.. please do reply.. or may reply on manish505@list.ru .
THANKS
Hi Manish,
I have applied for a term insurance policy, my father died at the age of 58 due to natural causes, however almost 7 year ago (age 51) he had a stroke. But since the declaration paper says whether any relative had died due to stroke within 60 years, I have not mentioned his name there. Can there be any problem during settlement of the term loan for this? Further, during submission of documents I have submitted all the policy details (no term insurance taken till date.) However, most of these policies are to be valid till 2030, I wonder if based on this declaration my term insurance amount is reduced then after 2030 my overall SA amount would be less. Also, should one declare PMJJBY and PMSBY in these declarations? Thanks, – Dinesh
It can be an issue. YOu still need to declare that because past family history is required to understand how it can impact your health
Thanks Manish!
Hi Manish,
This is Shravan regular reader of your blob..I have couple of questions on term insurance.
Request you to please clarify the same.
1 question : I took one ICICI online term policy of 40 lakh and successfully paying premiums from past 3 years.
I also took LIC ( offline) term policy of 40 lakh with 20,000= premium annually 2 years ago and paying premiums on time.
My income at the Time of LIC office line policy was 6 lakh +, however currently my income has reduced from 6 lkah to 3.18 lakh.
Will there be any impact of issue with regards to the income being decreased. do i have to update the insurance company about the income details to avoid any claims rejection in future if any.
Now I am planning to apply of LIC online term policy, once i get the policy would like to drop the LIC offline policy, however due to less in come I am not able to apply the same.
is there any criteria to follow with regards to sum assured amount..
Please advice.
Thanks,
Shravan
You dont have to take any action for life insurance . Income has no relation to your claim later
Hi Manish,
If the person is holding multiple policies from the same company (example Birla Sunlife) still they need to declare the old policies. Please suggest.
Thanks
Yes, they still need to
Hi Manish,
I have folliwing query:
I have not disclosed 3 polices that I currently have with LIC & Tata AIG before opting for a ULIP product from a private company.
I realized mistake myself….wrote them mail couple of days back saying it was mistake and non deliberate. I provided all details of previous policies to them via mail and at branch as well.
Now I am worrying if they can eat up my investment portion also saying that agreement is null and void as material facts were not disclosed.
Can they eatup fund money……forget claim am talking about only ULIP fund value here.
I am yet to receive any reply from their end. Just a query in advance as its bothering me.
Also under what circumstances can a company deny returning fund value of ULIP after lockin period of 5 years. I understand claim can be rejected, but what about fund value? Can they reject that as well? Citing non disclosure of material facts like not informing about previous policies?
Thanks,
AB.
No , this wont happen . Its not such a big issue that they will cancel the policy. In best case, they will include the info and if there is any premium difference they will let you know
Thanks for replying!!! …they have just acknowledged my mail. Sum Assured of combined policies was not that high; else they might have asked for medical. Got another ULIP from same company meanwhile, with all disclosures.
Welcome .. Glad to know that Ankur ..
Hi,
I am planning to buy health insurance from private insurance company instead Public sector company. Is it good to have it from private sector company?
One thing I observed that with public sector companies cashless facility is available with only few hospitals but with private sector companies lots of options and also there is not much difference in premium.
What should be ideal sum insured amount one should go for? as I also have cover from my employer 2.5 lacks covering me, spouse and parents and now I am looking for myself, spouse and two children.
Prashant
The first thing you need to understand is that health insurance cover from employer is not fixed . I mean it can go away and its actually going away from many years. so better have your own policy in place.
Private or public, both are good and some policies are really good. Do one thing
Leave your details at https://www.coverfox.com/jagoinvestor/ and you will get a call from our health insurance partners !
Manish
Hi,
I have HDFC click to protect term insurance plan. I have not declare other term insurance plan which is from my employer and Employer pays premium? Is it necessary to declare it?
Can’t get benefit from both insurance companies after death?
Prashant
You dont need to declare your employer insurance, because you are not paying the premium !
Thanks Manish for quick reply
Sir, I have applied for a term policy in July 2014 MNYL through Online for 1 cr. the Policy is rejected by the MNYL by writing that due to Elevated liver function test. Now again i have applied in SBI Online Line Term Insurance of 50 Lacs. Now the SBI peoples ask me about the reason for the Rejection of MNYL policy. Please Suggest me what reason i have to provide. If i provides that medical reasons then may be they reject my proposal. So can i give some other reason beacuse i have no health problems. My SGOT and SGGT, GGTP are only increased. Also Please Give me the Details of section 148. Please Suggest me………. Thanks in Advance
You will have to give exact reason only. Else it will amount to fraud .
This is subash.. I have not told exact sum assured for old policies while taking new term insurance policy. is this will give any problem at the timing of claming ?
Yes it can be an issue if its significantly different .. Better check it with the company and update them
Thank you so much.
I really appreciate for all your valuable guidelines. It feel like my money is safe now and I will strongly tell him now I am running out of money, please close my application.
Thanks
Sathya
Web Developer
Sure !
Manish,
” Thank you very much for your suggestion and valuable guide to all of us. ”
Sorry my question might be in wrong section but cant able to find the question which already raised by users.
Recently One LIC Agent came to me and asked me to have a Jeevan Anand Policy for 25 years and amount 15 lacs . Since he forced and convince me, I have decided to go for it later on I have gone couple reviews same forum and plan to stop.
Next day agent came @ my home and collect all the docs photo, Pan card, payslip and cheque for first payment ( quarterly ). I told him I have already one more policy so don’t process my application untill I inform you. But agent told me “no sir, unfortunately my junior processed your application”.
I came to know he is doing purposefully. So I spoken to my bank customer care and ask them to stop the process of fund to cheque no. and to make my application rejection. But still my agent saying you need to pay the amount, due to the policy processed and system generates policy no so it cant be taken back.
Can you please help me over here
Thanks
Sathya
When you have stopped the cheque, there is no way you should pay . Its not a contract .
Just keep them yelling, and tell them you have run out of money, the agent should put the money from his pocket and from next year you will put . JUst because he is saying , that should not make you responsible for it .
I have just applied for an iTerm policy from Aegon Religare. They asked me to list all the policies I had in last five years, whether active, paid-up or surrendered.
Also, there was no place to mark the status of a policy. This defeats the purpose of accessing how much insurance cover I already have. Do they add up the cover for a surrendered policy too? Is there any other reason behind asking for previous policy coverage?
Just might want to understand something which they only know 🙂
I have a question, appreciate your response. I took a term policy from LIC in 2010, due to medical reason they asked for extra premium. I have recovered fully since then and the policy is still in force. Recently I applied for another term policy from Aviva. Declaraing the details of LIC policy, extra premium and medical history. Now, they also want to charge an extra premium, because I paid that to LIC. However, the medical reason at time of LIC premium isn’t valid any more. What do you suggest? Can I complaint to IRDA for their insistence on extra premium for no definable reason?
Jayesh
It works like that only. Its all about what kind of illnesses you have suffered in past, because that puts you in high risk category customer.
Hi Manish,
I should have read this article atleast few weeks back 🙁
Coming to my query – I did a mistake. I took a LIC term insurance last week (SA: 40lakhs). While filling up the insurance policy form, though I saw a column to declare the old policies, my agent asked me to leave it blank as it doesn’t matter. Since I didn’t know about its seriousness then, I didn’t declare my old policies (1 endowment policy and one term insurance of 50lakhs from ICICI). The medical test was also done last week itself and I’m expecting my policy to be issued anytime from now.
After reading this article I’m scared. Can I change/update my details regarding my old policies after the bond has been issued? Please do reply.
Thanks and Regards,
Anand.
Yes, you can update your information later, but it will be upto company what do they decide about your policy
Manish,
I had a doubt on similar lines. In my case, my term insurance policy form was filled up by the agent himself (He is known to me from past 10 years). Though I had given him full details about all my existing policies, I’m not sure if he has really mentioned them in the form (It’s my mistake that I didn’t cross check the form).
I just wanted to know if these details (pre-existing policies) would be mentioned anywhere in the policy bond? Because only based on that I can go ahead and update my details. I’m too expecting bond by next week.
Regards,
Nanda
What you can do is contact customer care and ask them about these details, if they were mentioned on not . If not, you can update them with all these info !
i have taken two policies from BSLI in 2006 but not mentioned my earlier policy taken from LIC in 2001 and in 2011 i had surrendered my both BSLI policies taken in the year 2006. Now in 2012 i have taken one more policy from LIC and disclosed only policy taken in 2001 from LIC assuming that it is not necessary to mention the closed policies. Is it in order, if not what are the remedies. Pl. advice.
Yes, its fine .. you only have to mention the ACTIVE polices. not closed one, unless asked specifically !
But i had not mentioned my active policy taken from LIC in 2001, while taking policy from Birla in 2006 which i surrendered in the year 2011. My policy from LIC taken in 2001 is still active. pl. suggest would this affect my claim for policy of LIC taken in 2001.
It can .. Better you inform to the insurers now !
Dear Manish,
You have informed that the insurance companies may reject the claim on account of non disclosure of the previous insurance policies. Are there any case laws in this regard. I am making a project as part of my college assignement and was hoping if you could guide me with the caseslaws.
Its a RULE . Even if there are no cases, how does it affect ?
Dear Manish,
Have there been any cases wherein the court has passed ann order alloing the repudiation of the death claim .
Hi Manisha, Just a small query
I am in the process of buying a term insurance policy with Accidental death benefit from SBI. As usual they have asked to declare my exisiting policies…
My question is as follows:
I have a term insurance policy provided by my company which is a group term insurance policy. when i change or leave this company, this policy automatically expires. Can you please provide me some clarity if i have to declare these details?
No you dont have to declare this group cover. You only have to declare policy taken by you personally
Dear Mohit,
1.Recently I have tahekn two policies at a time from LIC with medical done and declared all the existing policies with LIC as per the advise of the DO.
He told that I need not not require other companies policy.
I have opted for Home loan protection plan (Master policy is with SBI – it was a group plan with single premium) Do. I need to declare all the other policies for this coverage.
Do i need to declre this SBI plan for home loan protection (SBI is master policy holder) to the other companies.
3. I have taken two years back one aegon online plan I have not declared the other policies
4. Five years back I have taken two polocies from Bajaj allianz I have not declared other policies while taking this plan and also not declared this policy while taking the recent policies
5. Recently I have taken single premium plan HLPP covering life for outstanding loan amount. In this plan no coloumn was there for declaration of other policies.I have not declared this policy while taking new policy recently from LIC.
6. I am having Personal accidental insurance (taken from future generalli),and mediclam from oriental .Shall I need to declare these while taking other life policies
Pls. advise what should I do.
Vinod
Always note … you have to declare OLD policies to NEW insurer of same nature always . If you have OLD LIFE INSURANCE POLICIES, then you need to inform NEW LIFE INSURER about them . You can ignore accidental policy
Hi Manish,
I don’t know (Remember) whether i have declared the previous policies details in the new policies. Can i update the Insurance companies now about all the policies I’am holding.
Regards,
Kalyan
BEtter talk to the customer care and find out if you have declared old policies or not . If not, then you should.. the company might accept it (high probability) if it was not such a big thing which could have influence their premium !
Thanks Manish for the prompt reply.
Hi Manish,
Do we have to declare policies to earlier insurance company for any policies taken at a later stage from different insurance companies.
I had taken few policies from LIC’s in 2001-2003 then in 2008-2010, taken few plocies from ICICIpru (ULIP) and 2011-2012, couple of policies from Maxlife.
Is there any additional feedback for nri’s who has taken these policies or taken any policies out of india.
Rgds
Yes you had to do that, but you failed in that .. better inform the new company about the old policies now
Hello Manish Ji,
I wish u to please confirm/help me on:-
*Please confirm whether the Life Sum Assured is inclusive of the sum assured of Critical Illness Rider or not. If yes, why do the company charge extra for that.
*Whether cancelling policy within free-look period is free from any deductions or not.
* If the nominee name has been wrongly fed in my policy document, and company is not changing it on my policy document, what can be done, what may be the problems.
Manish Ji hello,
Can u please confirm whether the Life sum assured is inclusive of the sum assured under Critical Illness rider or not.
If yes, why do they charge extra for that.
and are there any deductions for cancelling the policy under freelook.
Sir, i have taken a Term Policy of 2 cr from Birla. I have disclosed my all the Previous Insurance Policies with policy no., premium amount. but i have not disclosed the Loading amount in the Previous Policies. does it efects at the time of Cliam. Please Suggest………. or is it possible to Inform the Company now.
What do you mean by “Loading amount” .. If you have given the sum assured of the previous policies, thats enough !
Loading Amount Means Extra Premium. Because in Birla Sunlife Application form they are Asking that ” Have you ever had an application for life, accident, medical or health related insurance refused, withdrawan, declined, postponed or offered with restricted benifites or with an increased Premium or made any claim under any such policy of Insurance with BSLI or any other insurer in india if YES Give details ” Sir i have already a max newyork life policy where they have charged extra premium due to medical terms. Sir i have declared this policy in the application form with Policy No, Date of application, year of issue, sum assured. but in the colloum of Extra premium i have not declared. Does it effects at the time of Claim or Not……… please Suggest Sir ji
No , you dont have to give premium information anyways while filling up the form . Did the policy ask for the premium you are paying ? Thats very strange !
In the company asked for the details of any previous policy then i have informed to company that iam haveing a policy of MNYL of sum assured of rs 25 lacs. but in the other coloum i have not declared about the extra premium they have charged from me. please suggest
That does not matter
Thanks for Reply Manish Ji,
but My Point is not Cleared. in the Birla Sunlife Application form there are two Different Paras for the information about old insurance
1. Is there any concurent and / or any existing insurance on yours Life for life/ health/ accident/ or ther riders in effect with BSLI or some insurer in india. if YES Give the Details.
Answer : Ploicy no. 83213284 Max New yours Life taken in 2010 sum Assured 25 Lacs
2. Have you ever had an application for life, accident, medical or health related insurance refused, withdrawan, declined, postponed or offered with restricted benifites or with an increased Premium or made any claim under any such policy of Insurance with BSLI or any other insurer in india if YES Give details
Answer : No.
Sir in the Above two Questions if have given these answers. But the Realty is that I Have a life insurance of MNYL of Rs. 25 Lacs with increased premium. That i Have Declared in question No. 1. But in Question 2 i have Not Declared that the MNYL is issued me the policy after increasing the Premium. So Please Suggest Brother weather i have to declare that or Not. the Policy is already issued by the BSLI.
In that case you should be informing it about it now , contact their customer care !
I have recently taken SBI Life Term Plan with Critical Illness Rider, is this helpful or I should discontinue it, right now as I am 30 years old.
You took it with some reason , right .. why are you in doubt now ?
And should we declare this (CIR) coverage while taking any further term plan.
No , CIR should not be disclosed !
Thanks a lot for quick response, I have recently taken SBI Life Term Plan with Critical Illness Rider, is this helpful or I should discontinue it, right now as I am 30 years old.
Thanks a lot.
Hi Manish
Do we need to declare policy details of Pension Plan having “No sum Assured”.
Plz Clarify.
No , if a policy does not have a “Life insurance” component, then you dont need to declare it !
Very informative and useful post.
Got here just what i was looking for.
Keep up the good work !
Thanks
Thanks Amol
Hi Manish ,
I have applied for E-KOTAK TERM PLAN,
i have declared all my previous insurance Policy Details but against each previous
Insurance Policy they are asking for Disability & critical illness benefit in terms of amount . For which i am not aware , i have submitted the hard copy documents to them and declared in the column as NOT SURE For(Disability & critical illness ) After going through the hard copy documents they are asking me to change from
NOT SURE to NO .
My concern : Can i declare No and use the mail a proff in case.
Why dont you know the critical illness amounts for your last policies, you must have choosen the amounts , so you should remember , also if you dont remember, you can just look the old policy documents and find out the amount
Hi Manish,,
I have five LIC polices taken different branch with different Agent but I don,t know how can Agent filled up the Proposal form as only signature was made by me…Now my question is I need one TERM policy from LIC AMULYA Jeevan @ Rs.2500000.00..how can I check the other five polices proposal form for my best future claim settlement???????
What do you need to check there, just mention about the previous policies in the new term plan form , thats all
Actually I need the previous information like family history,income,address etc places above polices is correct or not …because I am going to buy a New Term policy where I can put only right information in same compny (LIC)
I didnt get wht you are saying !
Hey..Do we have to disclose mediclaim policies too??
Thank you:)
Not in the life insurance, but if you take a medical insurance , then you have to disclose the medical policies !
Dear Manish,
I have recently purchased a term plan of Birla Sunlife. Have informed them about the other plans of different insurance companies I hold. But have not informed the other companies ( older ones) about my recent purchase. Is it mandatory to keep the other companies informed of my recent purchase ( Birla Sunlife)?
Thanks
No , you dont have to inform the old companies about the new one . Its just required to inform the new one !
Dear Sir,
Indeed informative whatever discussed.
Request your valuable time to resolve my query>
I have filled up the online proposal form of Bharti axa life insurance with cover of 25 lacs.(Policy currently not issued)
I did have 3 policies of Max new york(1 term plan, 1 ulip plan, 1 traditional plan) and 1 term plan from future generalii but all are in Lapsed mode. I have’t paid premium to all of these lapsed policies for roughly around 3 yrs 6 months. While filling up the proposal form of my new insurer(Bharti axa) I did mentioned details of some of the lapsed policies but not all of them. I do not intend to revive theose old policies either.
Now my question is- Have I done it right?? Should all lapsed policies be mentioned especially when I have not paid the premium for more than 3 yrs 6 months.
Pls. suggest.
I think it still should be mentioned, because you didnt pay the premiums, so those policies might be in a paid up option now
Thank you so much Sir for your guidance. I have mailed to the Insurance company stating that I may have more lapsed policies and have asked them to reply me If they think that details pertaining to all lapsed policies are an integral part of their underwritting process so that I can gather all of them and sent it across to them. Apart from this I have 1 accidental policy of Bajaj allianz “Safe guard” with a cover of 5 lacs. To be on the safer side I have mentioned that also in my mail to the company. Request your valuable suggestion on this.
Good to hear that , better safe than sorry!
Dear Sir
My Mother Has Taken Max Policy.We are living some Ruler Place
And She was No More. But Now max rejects her Daith cailm Because
She did not declare ather policy and I Know very well Axisbank manager not ask her anther insurance policy. Please Help me sir What Can I Do ?
Thank You
Narayan
Claim will not be paid, it was your mother responsibility to inform the company about the other policies, its always a proposal from the policy taker , when she signed the policy , did she check that everything mentioned is correct or not ?
sir , I am 46 years old in a central govt job. Till now I have no insurance policy. I want to have a insurance for live cover+ investment for around 5-10 lakhs. Please suggest me good policy for me. I have also a current Home loan of 37 lakhs till retirement.
You should take up a term plan .
Hi Manish,
Thanks for providing valuable information. However, i have a doubt regarding this rule…
Why does the insurance company wants to know about our old insurance policies?
As per Insurance principles, one should not be using Life insurance for Profit , it should only be used to cover the risk of your future earning. thats all .. So if your life insurance requirement is say 1 crore (by logic) , then suppose you have already taken a cover of 1 crore, then ideally you should not get any more life insurance, so if you declare this fact to the new company , they will reject your application and not provide you more cover, which is fair !
But if you do not tell them, then you can again take 1 crore policy and like this , may be you can take 10 crore policy from 10 difference companies (1 crore each) . this is againt life insurance principles .
Thanks Manish for a quick response…
Hi,
I have two policies from different companies. Both are life insurance policy and on maturity I will get my money back. With such policies also do I need to declare to the other companies regarding the details of the policies?? Or this rule is only applicable to term life insurance plan like getting bulk money back after death within the term??
Thank you….
No , its actually for any policy which has a LIFE INSURANCE component .
I want to buy a term plan my income comes around 8-9 lac per year. How much maximum SA I could get from term plan. Also i have one LIC Jeevan Anand life insurance traditional policy. Also, i have home loan of about 20 lac. I have policy for covering 30 lac insurance of home loan also from LIC. Do I need to mention all these policies while going for new term plan.
U need to mention all these policies if its covering you for life , you can get around 1.5 crore term plan
i want to buy traditional plan from max,agent showed me 3 types of returns-guaranted,non-guaranted(@6%assumed rate) n non-guaranted(@10% assumed rate) when i asked which one i will get he guaranted the maximum amt i.e @10%,i am confused ,is he right?
thanks,
piki
Hi Manish,
If I am having 2 insurance policies 1 is from LIC and other is from ICICI if my claim amount settled from LIC then ICICI should not reject my claim.
Is that true if one insurance company ready to settle claim amount then other company should also pay the sum assurance for insured person.
Thanks,
Sreekanth
No it is not true ! .. One company may honour the claim and other can reject, it happens !
Hi,
Thanks for informative article. I have a question about policies done by company we are working for. Do we need to declare those policies as well? If we change company those policy will be no more valid, so is there a need to declare such uncertain policies?
Thanks in advance,
Babu,
No, you dont need to mention corporate policies.
Dear Manish,
Firstly, appreciate your effort for putting up very informative articles on investor education.
I had a doubt, recently i purchased UTI-ULIP policy. I asked them whether u want details about my existing insurance policies, but the concerned authority at UTI said that they do not require any details about my existing policies. Now, what do i do? I hope my claim won’t be rejected in future.
I already replied you on this !
I am a private employee I have already taken a insurance for 5 lacs and i wanted to take another insurance (jeevan saral) but my insurance agent told that since your insurance amount is above 8 lacs ,you need to take a medical fitness by their medical doctor(lic’s doctor) I dont understand why? I am aged 42 years today
Company Policy !
Hi,
I’m planning to buy a Term life insurance policy. I need help in following:
1. Should I disclosed even surrendered policies?
2. Should I disclose life/health insurance policies by my Employer?
3. Should I disclose my car insurance policies?
4. Should I disclose any joint home loan insurance policies of which I am a joint life assured?
5. What if I am not aware of any policies that my parents/spouse might have taken for me?
Thanks & Regards
Ajay
Ajay
1. No
2. No
3. No
4. Yes (if its life insurance)
5. This is not an excuse . You need to be clear about it, ask your parents about it
I want to thank you from my heart for helping so many people in taking decisions regarding insurance. You are doing a great service…keep it up…
I have a query regarding disclosing of policies
1. Should I disclose life/health insurance policies by my Employer?
Are you sure that we don’t have to disclose this information?
2. Do we need disclose pension plans (HDFC Pension Plan 2) also?
Would appreciate if you can reply at the earliest
Akash
You have to disclose all those policy where you are paying premium from your pocket ! and it has life insurance!
Hi Manish,
Thanks for your quick response. I am really not sure whether i had declared abt my ULIP while buying Term ins. or not. i have dropped mail to then to check on that. so in case, if they say that it wasn’t declared –
1. what should be the solution now. will declaring it now would resolve the issue and claim of insurance amount would not be impacted [if required in future ] becuase of this or might be troubled?
should i go ahead and keep paying me yearly premium.i had bought it in 2008 so till now i had already paid 11k*3yrs ~33k almost. or would you suggest me NOT to renew / pay for this term insurance any more and buy new one with proper declaration of all the existing insurance?
Lack of information on my end is causing lot of money 🙁 . looking forward for your expert advice.
Thanks
thanks Manish..that was new to me.
In my case i have ULIP as well as Term insurance plan from same firm and if i remember correctly i didn’t declare it while buying term policy. BUT now i’ll be liquidating the ULIP holding by the end of this year. so will it still impact the term insurance? even if i liquidate the ULIP?
could you advice ?
Sadly yes , the point is at the time of taking your violated the rule , and in your case the chances are more than the insurance company will come to know about it as its form same company , I think you need not worry too much , just contact the company and tell them about it , they will update this without much fuss . Just takes few email exchanges ! , why not better safe than sorry — oops ! .. you will not be there to be sorry also 😉
Manish
Hi Manish
Thanks for your quick response. I am really not sure whether i had declared abt my ULIP while buying Term ins. or not. i have dropped mail to then to check on that. so in case, if they say that it wasn’t declared –
1. what should be the solution now. will declaring it now would resolve the issue and claim of insurance amount would not be impacted [if required in future ] becuase of this or might be troubled?
should i go ahead and keep paying me yearly premium.i had bought it in 2008 so till now i had already paid 11k*3yrs ~33k almost. or would you suggest me NOT to renew / pay for this term insurance any more and buy new one with proper declaration of all the existing insurance?
Lack of information on my end is causing lot of money 🙁 . looking forward for your expert advice.
Thanks
Just inform the company about it , it should not matter much once you inform it .
Hi Manish,
very nice article , I have gone through the entire thread and found the information very useful. I have taken few plans as mentioned below:
1.purchased SBI life pension plan 6 years ago(has life cover element of 5 times of yearly sum assured[60000] ) pays premium 12000/- yearly- 200
2. purchased ICICI person accidental yearly plan 5 years ago for 3 lac (pays premium 6000/- yearly )
3. LIC money back plan (has life conver element for 5 lac) 2 year ago pays premium 22000/- yearly
4. Lic term plan for 50 lac( pay premium 17000/-) last year purchased
Today, my ctc is 12 lac, and as per your thread calculation I can take 15 times(like 1,8 core) life cover.
When I took the LIC term plan, mentioned the previous LIc policy and did not mentioned others as I was not aware of rule to mention other policy as well.
my question is that My life cover is less (aroud 60 lac) then it is supposed to have (1.8 core) today so in this case. is it necessary to updated the details of all other old policy in lic term plan? or my claim would be settled as it is not crossing the limit of 15 times of my income?
please advice.
thanks
No matter what you need to disclose the old insurance policy to the new insurer . There is no exception !
Dear Manish Ji
Ita very Very Good Job You Doing , People Being Educate For Their Finance / Insurance Etc…
Here My Question is-
i have taken a LIC Moneyback policy in Year Oct 2005 For 20 year on Yrly Premium of Rs 12500/- but i paid only 2 year premium Then POlicy lapsed
2nd, I tried a LIC Term Plan for 20 Lac In Year Oct 2011 which required some medical tests etc which was ok except to overweight, then lic lic asked me to submit my salary slip/income statement for last 3 year/ITR/ and a cancelled cheque which i provided them, as per my agent my LIC Was Stucked into Their Zonal office due to some internal miscommunication like Class 1 & Class 4 Something, also they increased my premium ….anyways i annoyed and asked to get my 1 premium back…………. meantime i bought another policy from LIC Jeevan Mitra Tripple Cover Which is inforce From 14th march 2012 ( include medical tests) i have recd LIC bond also, …..also i have got my stucked premium from lic in june 2012 month…..
Now My Question is while taking this new policy jeevan mitra i didnt mentioned my 5 year back lapsed policy and also didnt disclosed about this term plan proposal
So is there any problem in future ….while getting claim from LIC ..if smthng goes wrong with me ????
right now i have only One POlicy from LIC …
Please do reply
Thanks
Anurag Bhandari
Anurag
No , while taking the policy you had only one policy which was not active, Term plan was just on proposal stage , so nothing to worry
Thanks you Manish Ji
For Your Quick response
Regards
Anurag
Thx for devoting time & sharing your knowledge. My ques is do I need to declare even when all my policies are from same company?
Also any clue abt launch date of lic online term plan?
Yes
every time i took lic plicy i just sign on lic application form other remain is filled by my agent i dont know that he is mentioning about my old policies or not .agent have full detils of my lic policy . i took all 6policy from same agent .if i want to know whether he is mention or not wht i have to do . & if he is not mentioning all details & i want to mention all detials in my old policy wht i have to do .?
Parag
This is a serious issue . You should first contact your LIC customer care and talk to them on this and ask if your old policy data is there or not . You can also use RTI for this as LIC comes under RTI .
If there is a loophole then you can update all the old policies in your new policies through customer care
Hi Manish ,
This site is very useful.
Just wanted to clarify my understanding is correct.
So if I have say three policies.
Policy A(Life insurance)
Policy B(Life insurance) –> Forgot to specify about A.
Policy C(Term insurance) –> Mentioned about A and B.
Policy D(LIC insurance) –> Mentioned about A,B and C.
So in the above case I understand claim can be made for Policy A,B and C but not for Policy B since old polices were not declared.
Say If i discontinue Policy B and if i open new policy E I don’t have to declare about Policy B now since its no longer active. Am i right ?
How exactly is the max Sum Assured cap decided for a Individual is it roughly 10% of your annual income ?
Yes you are correct .
Hi Manish,
Thanks for all the info. Had 1 quick Q before I proceed with my term plan. I believe applying in parallel with 3-4 shortlisted providers can help me know the premiums for my profile at once and helps me make my decision. In such case, can I inform the insurance provider once I get the policies issued and it may lead to change in the underwriting? Pls help me understand how it will work.
Thanks!
Pankaj
If a company form asks “Have you applied for any other life insurance along with this policy” , then inform them , else not
Thanks Manish. How abt informing them after I choose the providers (let’s say 2 as split) and get the policies issued. If I don’t inform them, would it not be non-disclosure?
No you dont need to , only at the time of taking the policy, if there is any active policy , then you need to tell them
Thanks Manish for an informative article. I wish I had read this couple of months back. I applied for Bharti online term insurance and after their analysis of the data supplied, they came with a rate increase. I declined to accept the proposal and they have also refunded the entire money back. Later I applied to ICICI online term insurance and I didn’t disclose this information as Bharti insurance was not even approved or started. It was only in proposal stage and I declined it. I disclosed only my active/existing insurances. Is this fine?
Thanks,
Priyanka.
Yes this should be ok
Thanks Manish, will start with that forum.
Though, can you just answer this one small bit since we are in the thread:
From subsequent insurance company’s point of view why do they need to know of our previous policies if any? And if it was just a ‘good to know’ info I can understand, but why is it such a mandatory and critical info so much that not declaring may even result in rejection of claims?
I still don’t get the regulatory (IRDA) or financial reasoning behind this.
Thx manish for quick turnaround!
It’s quite possible that he may know someone back in my native village (he too still stays there). But I’m not sure how/when if that may happen. Is there no way for me to approach some LIC office and ask (even pay a nominal 100-500 Rs transaction fee if required) and ask “baba, pls tell me if I have any policies with you?”.
Regarding second half, yes I am concentrating first on term-insurance. (Assuming this stumbling block is cleared soon, hopefully), I want to know which other type of insurance I should be buying for self and my family?
Term insurance is purely for life, isn’t it? For other medical, health day2day, I should be buying something else as well no? What should I be searching on your site for more info about those products?
Luckily I am now in a position to even think about these things. My first few years of savings were all gone in clearing family debts, supporting brother’s education etc, some other medical-emergencies in family, unforeseen expenses – basically never got my head above water, financially speaking. So never even read/learnt about these products. Only last one year or so, I am now in a comfortable space where I can think about these.
Thx for your help really and for this excellent site. It’s a treasure trove of info.
I think you should give it a try first , lets see if plain enquiry helps , but I would suggest start a thread on our forum and take some more suggestions on this from fellow members : http://jagoinvestor.dev.diginnovators.site/forum
Hi Manish,
Excellent site this is.
After working for 10 years, this is the first time I thought of taking term life insurance and I came across your blog. Also read a lot of similar posts on your website. This is the first time I’m even reading about different concepts and types of plans and terminology/jargon out there in the mkt. Even then I don’t know much. You can call me a ‘kacchi-roti’ in this 🙁
So pardon me for asking some basic questions, but if you can answer it will really help me start out on a good note:
a) Why does 2nd, 3rd …nth insurance company want to know of any previous plans? How does it help them in quoting their premium or settling claims?
My grandpa was an LIC agent and when I was a kid upto college-going age, he took several policies in my name in different years (sometimes even paying premiums himself). I don’t even know what type of policies they were. Some came to maturity, some were canceled/(surrendered?) halfway, rest I don’t know. All were meagre amounts and I believe now, that, apart from love for his grandkid and securing my future (no doubt about that) most likely he might have taken them also to reach whatever commission level he would’ve been aiming for. As a family we were never into insurance, investments – we could hardly afford day2day living, who has money for all this. Grandpa too was doing this LIC thing on the side.
He is 85+ now, with deteriorating health has stopped all LIC work for last few years now, and I’m definitely sure, he will not have any records of all my previous years policies. Neither do my parents. Because even when they paid for it sporadically, he was the one handling all paperwork.
How can I find out if I have any active policies against my name? Can I just land up in some LIC office with my name/DOB and other similar details from 30 years ago and find out about them?
After reading many of your insurance posts, I felt very happy to know more about term insurance – but this is one HUGE stumbling block for me. Pls advise.
b) Secondly, for someone who doesn’t have any insurance till date (no health insurance, no life ins.) not for self, spouse, kid or parents what is the best way to start thinking about insurance?
FYI: I am 32 yrs male, annual income ~8-10lacs, non-working wife, 2 yrold kid, retired dad, housewife mom – all of whom I take care of.
As far as I’ve understood from reading yr blog and subramoney is that I should start with online term insurance for pure life policy, and keep medical insurance and investments separate. Is that correct?
Thanks.
-Samir
Samir
In your case , does your grandfather know some other close LIC person whom he can ask for assistance . He can search with your grandfather agent code that what all policies he had sold, it will have list of those also which were for you .
You should now get term plans to cover yourself first and then think about investments !
Hi Manish,
I am a 25 year software professional. When I was 21 I bought a LIC Jeevan Anand policy. Then Last year, I bought a Birla Sun Life Insurance’s ULIP Platinum Advantage Policy. Then After couple of months after that, I bought LIC pension plan policy. I remember In case of LIC pension plan scheme, I’ve declared the old policy from LIC but not from BSLI. And for BSLI I’ve not declared the old LIC policy?
So how would it affect me? What should I do?
Please suggest.
Thank you,
Nilesh
Not sure if you have to mention about your insurance policy in a pension plan ? Did it have insurance component ? If yes. then it has to be declared and if you have not declared it yet , call the customer care now and tell them
Manish
LIC Pension plan has Insurance Component. I’ll call customer care and inform them about policies. Thanks for the help.
Should I tell BSLI guys about my LIC policies also?
Nilesh
You have to inform new company about old company , not vice versa
Hi Manish,
I am 35 year old having two childs. I am planning to buy life cover (Term plans) of Rs. 1 Crore for 25 years. I am planning to buy a term plan of Rs. 25 lacks from LIC and another term plan of Rs. 75 lacks fom a private company.
Do I need to split/devide the Rs. 75 lacks into more than one company or can I take a term plan of Rs. 75 lacks from one company? Is it risky to take a term plan of 75 lacks from one company? Also could you please suggest some good term plans from private companies with good riders?
Please suggest… Thanks in advance…
Thanks
Ganpat Bagal.
I thikn its wise to take the 75 lacs from 1 company itself because you are anyways going for LIC for additional 25 lacs
Hi Manish,
Is this rule valid, if I took insurance on my daughters also.Bcos I think I did not mention about my insurance when I took Insurance on my daugter. Is that will create any prb to mine or my daughter’s insurance in future?
Vasu.
Vasudeven
If those life insurance policies are on Daughter’s name, then you dont need to disclose your policies !
Hi Manish,
I have a couple of Question
1) Is it necessary also to mention Corporate Life term policy ?
2) Can one nominate a person who is not a blood relation / Spouse ??
Jeeva
1. No
2. Yes
Thanks Manish…
Hi Manish,
I am 35 year old having two childs. I am planning to bye the “Bharti AXA eProtect” onlilne term plan. I have alredy purchased LIC’s Komal Jeevan money back plan of 4 lack sum assured for my daughter. Should I mention the LIC Komal Jeevan plan detail in the Bharti AXA proposal form? If yes, who is the “nominee” and who is the insured? I am bit confused..
Please reply ..
Thanks
Ganpat Bagal.
Obviously u should mention it , its not “should” , u “have to” mention about it as per rules . The nominee has nothing to do with old policy , its decided by you . Whom do you want to pass on the money after your death ? I guess it should be your spouse or daughter as the case may be . Insured will be you
Thank You, Manish
Hi Manish,
If I had not provided the information( I just signed on the locations that agent showed me :-(. I am now realizing my follies and now started to read and get educated) how do I provide those information now? How to confirm that those details are not present or absent from the insurance company?
Just call the customer care of the company and talk to them , mail them the issue and they will guide you
Thankyou Manish.
Since she is 5 yrs old now.That is what I asked this question.
Vasu
hi manish
i want to know if i forget the old policy number mentioning in new policy form
but as per my in come and medical reports sufficient to get the policy under the limit of company?will the claim be payable
NO , if you have not mentioed the old polichy to the new company and they know about it, the claim will not be paid . Ask your previous insurance company to give you the policy number
Hi,
The example sited here is more focused on the mistake of non-declaration of old policy.Well,that may be true.But as insured arranged to kill himself using 3rd person and police cracked the same no company were bound to pay the insurence money. They could not go for the cheap way of siting non discloser rule.PLEASE disclose the name of this insurance company. That will help future buyers also.The television channel must disclosed the name.
Suppose this case was relatively cleaner like insured faced a true fatal accident.also consider his plan for this high SA was derived by the much advertised concept of “Being adequeatly insured” rather covering his failure in business. Then this case will look different.
“Rule is rule” : Declaration is not provided. What that company lost for this non-discloser? Quantified risk was slightly higher (considering previous policy were only of few lakhs).They must have loaded the premium also on account of this. So I think it is ridiculus to site “non-discloser” for claim rejection.They also reinforced this kind of activity with rules.If that person not done the mistake of nondiscloser also The insurence company could say two signs in application form is more than 10% different and as “rule is rule” his claim is rejected.May even more follish reason could have been made.In India rules are highly skewed towards insurence companies.May be that is done to attarct more FDI in that sector.
From my cousine in US I came to know they have insurence products (like terms in India) like this: Any claim rejection compnay will pay all the old premiums with bank interest (their bank interest is very low).As they have a matured insurence sector its possible their. Ours is still in nascent stage. So companies are doing as they can.In some cases insured also.
Nishant
So at the end, what exactly is your conclusion. I think finally there is just one conclusion, what ever is the case , just make sure you disclose your old policies ,else its a non-violation of the rules and your claim will be in danger !
Well above post is mainly observation and realization. But as you asked for conclusion now I am figuring it out. Before coming to conclusion please check the episode of concern here:-
http://www.youtube.com/watch?v=3n_9hFzdVpc
That episode shows :
1> A guy called sandip killed himself(through his friend) for 1.5 crore insurance money.
2> He got a single 1.25 crore policy before 2 months of his death, Probably from a private insurance company. (At least office decoration shows it cannot be a LIC office). And only a private insurance company can issue a 1.25 crore policy to a businessman who is in verge of bankruptcy(refer episode).LIC needs last three year IT returns at least.
3> He got SA of 25 lacks in 6 more policys which he didn’t disclose in case last jumbo one.
4> It took 2-3 months after his death for crime branch to know that he killed himself.
5> These 2-3 months police stated this case as murder.
6> Claim raised immediately after the death. Immediate response from the insurance company was in favor of rejection showing the non discloser norm. Wonder if they didn’t know it just 1.5 months ago when policy was issued.
7> All of his claim was first rejected-then gone to court- then police cracked the truth-then court gave judgment in favour of insurance company.
8> As per some comments of the viewer of this episode over internet Sandip payed 1.8l as premium till death.(though this data is not verified and posters personal assumption/calculation)
One noteworthy point was silly mistake of non- discloser of previous policy which may be committed by anyone. Thanks to Manish for making the post to warn common people like us.
Now my conclusion:
1> Dishonesty will not solve any purpose however great the cause is. (100% true for common man)
2> Term insurance policy is not matured in India till now. Don’t make any future planning (proper one obviously) depending on them.
3> If bound to do the terms hire a competent lawyer first. Make him fill up application form for you in front of you. Steer clear of the agent/advisor of term policy.
4> Term polices are very risky for any insurance company. So any honest company will do any kind of investigation even before accepting your application form. Issuing a policy of high value may take nearly one year also. So avoid those who promise to issue quickly cause they know they will try hard not to process claim.
5> If possible consult a lawyer before buying high value term insurance.
How can non-disclosure of older policies be a ground for denial of claims?
How is it related to health of a person like smoking, existing ailments etc?
How does it matter to an insurance company to get to know about older insurance policies. Non-disclosure of older policies should, in no sense ,lead to denial of claim. I think this rule is totally illogical and is framed just to deprive people from claims.
This is already discussed in comments section , read them
Hi Manish, Munjal here from Hyderabad..One doubt, what if I opt for 2 insurance policies at the same time, same day from Same company. eg. I opt for a Term Insurance ( 25 lacs) and an endowment plan ( 5 lacs) on the same day form same copmpany like LIC. I will have to fill 2 forms and in the forms I cannot mention the ACTIVE policies since none of the policies are ACTIVE at that time. Incase we think we can add Term Plan details in Endowment Form, what policy number will we mention since the policy number for Term plan is not yet generated.In such a case how should we proceed. I understand we can wait till one policy number is received but what if one want to have both on the same day. Your expertise advise will benefit all…… Thanks for you great initiative on Finance.
Munjal
You only have to mention for ACTIVE policy , which is issued to you . If you opt for 2 policies on same day, you dont mention them .
Manish
Hi Manish, Thanks for your Reply.
Also want to check, suppose I opt for a polict from LIC today. Sum Assured 25 Lacs and I have no other insurance so dont mention any Active policies in the Form.
Now after a month I take a policy from SBI and will mention my LIC policy details to them. How would the process be to inform LIC abiut the new plan I have taken from SBI after a month. Will I need to infomr my previous insurer about the new policy I am taking. As these are such scenarios that the company may get reason to decline the claim. Need Clarity.
No , you dont need to inform anything to previous companies at all , it does not make any sense
Hi Manish,
I had taken 2 policies and do I need to mention the LIC to the HDFC members of the existing LIC policy.
1. LIC money back policy and have been paying the premium yearly for the last 7 years
2. I bought a home loan and along with that I also took a Home Suraksha Plus from HDFC which has cover of
III Major Medical Illness 36 Lakhs
IV Personal Accident 36 Lakhs.
Additionally, can you suggest, what term plan should I choose and will this HDFC riders are sufficient.
I am 36 years old and have been investing in MF+PPF+EPF with a corpus of 8 lakhs.
If your HDFC plan also have LIFE COVER (money when you die) , in that case declaring old LIC policy is compulsory , do it now
Hi,
Regarding declaration of old policies, if some one does not declare because of unawareness, but in future if that person takes one more new policy of any insurance company and declares all his old policies, then will the claim of all policies including old and new valid?
Bajarang
Note that the claim procedure of all the companies are seperate and has not relation with others .
Hi Manish…
Manish can u please tell me why the insurer want previous policy detail from their clients ??
What they(insurer) come to know from detail of previous policy??
Plz reply..
Hello,
They are only interested to know how much SA you are already availing and Are you eligible for the SA that you are asking to the proposed Life insurance company.
You can max avail only 15 to 18 times( I guess ) of your annual income as sum assured. above than that company may reject your application for Life insurance.
thanks
Suhas
They want to know what was your sum assured earliar before you take policy from them , its required to decide if you should get more or not and what should be the premium for you
So in that case shouldn’t one declare SA from employer as well?
No ..That is not to be declared
Hi Manish,
I took online term plan from Aviva in Feb 2012. I had taken 5 Jeevan Anand policies of 1 lac each which I wanted to disclose while taking the term plan but there were only two Text boxes avaliable to disclose previous policy details in the online form. I told to the Aviva’s sales person who was guiding me on phone in filling up the form that I have 5 policies but to declare it there is not enough space avaliable. He said its ok you if you declare only two policies.
Aviva has a policy that you in the event of any dispute you can request for the recorded copy of you telecon with their executive.It means telecon with their sales person can be taken as a proof that I had disclosed all 5 policies to them(?) Should I still disclose them about remaining 3 policies through email?Please advice..
Btw just two days back I have surrendered all those 5 lic policies & by doing this I completed all the tasks mentioned in the Jagoinvestor Action Month,all credit goes to you.. thanks a lot
Swapnil
I think you should atleast mail them and let them know about this incident . I am sure this should not affect your ongoing policy, but surely this one email can save your family from any potential future problem of claim rejection .
Hi Manish,
I got a query when I was going through this article about disclosing existing policies.
I had taken a traditional life policy-A for 1 Lakh for 10 years from Company X. This policy taken 6 years back
After 3 Years, I took online term plan-B for 2 Lakhs for 25 years from Company Y, but disclosed about Policy-A to this company Y. This policy taken 3 years back
After another 3 months took online term plan-C for 3 lakhs for 25 years from Company Z, but disclosed about only Policy-B (forgot to mention about Policy-A) to this company. This policy taken 3 years back.
Will there be any claim rejection from Company Z:
a. If claimed when Policy-A is in force?
b. If claimed after Policy-A is matured?
c. If claimed Policy-B first and then Poilcy-C?
Please let me know this.
Yes Markson
You should have mentioned both the policy to Z , now just tell them that you forgot to update about A , they will update the info on their side
Dear Manish,
Can u please suggest that only term policies has to be declared at the time taking another term policy or all policies one have, like child, ulips.
Vijay
Any policy which has LIFE INSURANCE element in it has to be declared .
Thanks Manish for quick reply.
Will Company Z accept now since I am updating them about Policy-A so late?
What if I close the Policy-A?
What if I close the Policy-A & Policy-B and take Policy-D from Company AB? but with disclosing policy-C to Company AB? Still can there be rejection by Company Z?
Yes company Z will mostly accept it now also , just let them know
Manish, thanks for the suggestion. I contacted and updated with this information. Insurer was so happy and they clearly reviewed and acknowledged it.
Thanks a ton.
Great to hear that !
hello manish…..
Thanks for all yours works. I am a new comer to your blog. Its just excellent and a must follow thing.
Now manish please put up your views about the postal life insurance products. I am aged 25 years planing to take a PLI for 10,00,000. Should i go for it???
Pls your views.
I am not sure if postal life insurance is available to everyone ? You might want to get more opinions at our forum : http://jagoinvestor.dev.diginnovators.site/forum/
When we buy a new insurance policy, are we required to inform the existing insurance company about the new policy purchased?
No Saisriram
Existing insurers are not to be informed !
Thanks Manish. Then, what is the rationale behind declaring the existing insurance policies. In what will be the insurable interest of the person or the insurance company affected by declaring or not declaring the existing insurance policies. I am sure there could be some reason, but not able to figure it out. Appreciate any thoughts on the same.
Old policies are to be declared to new company so that they can know how much insurance you already have , its needed in underwriting
Manish
I have always thought that the basic purpose of insurer asking about existing policies is to know about the person’s already existing coverage.
However I find that the ICICIPru on-line application form asks about the policies purchased only in the last 5 Years. I Wonder why they are not interested to know about all the existing policies (including the ones purcahsed more than 5 years ago)? This is not in line with what I though.(Surely a 100 L cover purcahsed 6 years ago by the person should also be of interest to the insurer. No?)
What do you think?
Yes Saket
generally the purpose is to know what you are already having , so that you are not covered for more than what you deserve , But their way of underwriting looks different . Not sure 🙂
Do we need to disclose the corporate medical and accidental insurance policy too at the time of buying the term plan? Also, when I bought a Aviva term plan last year, it only asked me if i had any life/health/critical illness insurance policy? I hope this should not cover the insurance policies provided by my employer. Also, small insurance covers like LIC Jeevan Saral need not be disclosed. Am i right in saying this?
Yes Varun
You dont need to worry .. Employer provided covers are not part of this and you dont have to disclose it
Hi manish,
Last week, I purchased Kotak e-preferred term Insurance. I had declared to them my old policies(one endowment and one ULIP).
I am planning to surrender my ULIP. Do I need to inform Kotak about this surrender?
Ram
No , you dont need to inform that
Hi,
Today is my first day in jagoinvestor and have came to know this biggest mistake I did in my Insurance policies. Infact I am not sure of my declaration in my intial policies but now I am going to update all.
Thanks a lot for this valuable information..
Just check with the customer care of your life insurance company and update them
How do you handle coverage by Company group policies? Do you need to mention those as well?
I am assuming when we disclose existing insurance policies, we are only disclosing policies we have taken in our name not group coverage policies where the insured amount may be linked to salary etc.
Thanks,
Vinod
Yes Vinod
You are correct .. group policies are not to be declared
is there a risk even if we cancel the ulip policy. I did not mention the ulip as i plan to cancel the policy after 3 year period.
Sreeram
Yes .. it does not matter what you do later , what matters is did you disclose the policy if it was active at the time of taking a new policy ? In you case you have violated the rules . Please inform them about it . What if you die today ? If they come to know that you didnt disclose it , the cliam will not be paid
I will talk to the customer support on it. But I think its frivolous to reject just for that reason. I can understand if I take 5 1 cr policy and done mention any policy in others. In my case I took 2 Term Ins. in the 2nd one I mentioned the 1st insurance. But I ignored my ULIP as I did not consider that as an insurance.
Sreeram
How does it matter what you consider ? ULIP has insurance component in it , and hence it comes under the purview of life insurance, if you dont consider it , how does it matter ?
Better disclose it now , mostly nothing should happen right now
Most informative.Here I seek your opinion on medical check up done by Insurance/authorised doctors where >90% reports are false &fabricated.Is it not a measure deviation for filing claim?Dr Ram.
HOw do you say that those reports are false ?
Hi, thanks for the information and advice. But could you please inform the reason why the new insurance company requires old policy data ? Regards.
Sunil
Dear Sunil, to underwrite the new policy so that your combined SUM Assured remains within limits. Say not crossing 20 times of your yly income.
Thanks
Ashal
Sunil
Go through other comments ,its already discussed
Hello sir,
I want to purchase a term plan of Rs.50.00 lakh, recently I searched the net and found that Aegon Religare’s term plan is very cheap compare to other company.
Need your suggestion …..
Yes .. you can go ahead with them .. they are fine .. but also explore other options as well
Hi Manish,
i want to go for a plan arond 60-70 lakh. i see rates of bharti axa online plan are very less if i compare with HDFC or icici online plans.
wanted your suggestion, is it ok to go with bharti axa?
Nitin
Yes .. bharti is one of the new option in term plan online .. You can go with them
This is an eye opening example.
Hi Manish,
I am a regular visitor and reader of your articles and it helped me a lot. thanks for that!!
Now, i have a question regarding this subject.
Many companies gives a accidental/term/medical insurance policy to their employees as a pert of CTC or on many products in the market we get free insurance cover when we buy such product (i.e. Debit card, Car loan etc). (I will name those policies as a Secondary source policies)
Do we need to disclose all those policies received by secondary sources to Insurance company when i individual apply for any policy? Is there any guideline by IRDA on this??
Regards,
Amogh
Amogh
Only the company provided cover will not come into this , you dont need to worry on that .. because its a PERK and its temporary (till you are employed) , but anything you take from your own money (credit card/ loan) etc, that will have to be declared .. note that they are also just like normal insurance, just that its bundled with some thing and made look like a “bonus”
Manish
Hi Manish,
I have taken a LIC endowmwnt policy in 2006, in 2007 I have taken a ICICI ULIP policy.Do I need to inform/update LIC regarding the ULIP policy sum assured details.
Could you please clraify?
Regards
Pramod
No , you dont need to update the OLD company , but at the time of taking the ULIP , you must have mentioned about your LIC policy , did you do that or not ?
Hi Manish, It is very useful to know this. But does insurance company refund the premium paid when it does not honor the claim?? I understand that it the onus of declaring material information rests with the insurance seeker, but shouldn’t it be the responsibility of the insurance company to assess the risk properly before granting insurance cover. when companies can go through the effort of setting up a TPA to facilitate medical underwriting, and having documentation requirement for financial underwriting, why not have a check from within the industry if the insurance seeker has any other insurance policy. Such checks can also be used to check if any other insurance company has rejected giving insurance to the seeker in the past ( which is also asked in the proposal document). It is not always with an intent of cheating that a person miss’s out these material information and many genuine premium paying customers may be under the illusion that they are insured when they are actually not.
Sinduja
Life insurance is a proposal which a person makes , not offered by company . So its onus of the customer to give all the facts . This is by design
Hi Manish, Thank for the information. I want to know if old policy has already lapsed then declaration is required or not?
No Mukesh
Old policies are not to be declared !
LIC would not issue a new policy if you have lapsed policy or a paid up policy in last 3yrs. Similar clauses may be there in other private companies also- but I am not sure. So be careful while making an existing policy paid-up or lapsed. Take a term insurance first (if reqd) before doing these.
I had a similar situation while applying for LIC term insurance. I had some existing policy with LIC and some other company. It did not pay their last yr prem. So in the application form I mentioned their status as premium due (with last prem. paid till… ). While filling up the form, I discussed the same with the underwriter (agent gave me his contact details). Initially Mr. Underwriter told me that, it is ok as my prem due is only for last 5 months or so, while processing the application he called me to inform that “their system” is not allowing to issue me a new policy as I have mentioned them as ‘prem due’. So he was suggesting me to fill up a new form without mentioning those policies (i.e. hiding information). He kept saying that LIC does not do all these checks unless their is an early claim (within 2yrs). I asked him to provide me this information in writing – he said this is not a rule, he is saying this from his 20yrs of exp with LIC. I was wondering what was his 20yrs of exp doing when he initially said it is ok if the prem of an existing policy is due for last 5 months! Anyway I disagreed and paid all the prem dues with penalty to make all those policies inforce. Then asked them to issue a policy. Recently I got to know that they are issuing me a policy as my medical reports are fine. I have done everything to be clear from my side. One thing is for sure, neither agent nor any LIC official would guide you to fill up the correct information in the application. Their target is to issue a policy with some loopholes. Not sure if that is guideline from their management. You have to drive it on your own to provide the correct information. Hope my experience would help others.
Regulators will always be in sleeping mode. It is probably a dream to expect the regulator to mandate the insurers to validate all the required information while issuing the policy. The cost of this verification can be shared between customer & insurer at some proportion. But once a policy is issued, claims should not be rejected on the grounds of false information/ information hiding. Because the premium that we are paying is for risk of life and not for the risk of misguidance from employees/ agents of the insurer as it was in my case.
Thanks for sharing this case with all of us , there are some learnings and some shocks 🙂
Thanks!
I have bought your book “Jago Investor” last month. I haven’t finished yet but it’s very good. I have also suggested my friends to read this book.
Great to hear that Mukesh .. would love to hear your review on flipkart!
manish,
just curious to know, how the insuracne company knows, has the person had another policy or not ? is there any central location of maintinting all insurance info.
like CIBIL for all credit history ?
Rama
Something like that might not be there .. But the point is if that is mandatory rule, why dont you follow it !
Rule is rule,
i am following and delcared as per the rule,
just to get to know only i had asked..
what do u think, if it is there like any agency ?, it is easy for companies also.. instead of getting know by informal.
company can decide it at the time of issuing new policy it self, even by mistake any one forgets also not be problem. for company also it is safe for them as well.
claim rejections ratio also will decrease . am i right ?
Rama
Yes a centralised repository would be better, but not sure how it can be implemented
Hello all, How to share this article to my facebook friends? I’m not finding share button on this page.
Shiv
You can just copy paste the link of this article on your WALL , or now if you reload the article , you should be able to see a facebook share button
Thanks !
The policies which are lapsed, that also have to show?
No , Lapsed policies are not to be declared !
Manish, really informative and scary. I have three policies and I am not sure if I ever declared them / dont even know whether I needed to declare as everytime the form was filled in by the agent and I just signed it (I know you would call me financial illiterate). Ever since I lost good bit of money and trust on the agents through Ulip schemes, I make sure that I read the policy T&Cs.
In nut shell, many people dont declare it because the agents fill the forms and they do only the basic mandatory details and for the remaining they put NA.
Giridhar
Why dont you go and correct that mistake now !
In general, how do companies (I know they are smart, but still) come to know about other insurance policy? Is it because claimant claims for it, or there are other ways as well? Let’s say one have Policy A of 2011 and takes Policy B without disclosing A in 2012. What is the risk in following two cases:
1) Policy A gets lapsed in 2013, and person dies in 2014.
2) Policy A still in force, and person dies in 2014. But family chooses to tear that policy document and makes a claim for Policy B only.
Prasoon
A lot of times, for claims you might want to get the xerox copies of some documents from first company to another one , at that time you have to disclose that you had an old policy. Then They might have some internal communication between each other to find out if you have any policy with them . I know what you are saying is that not 100% of times they can find it out , but incase they come to know about it, then you will not get a claim . So the point is “non disclosure” is a mistake and if possible you should not do it
Manish
Manish,
Thanks for the reply. I totally agree with you (as ever). My comments are not in contradiction(hardly I am qualified for that) to your article, it’s just to increase my GK 🙂 . So, if I read you correctly – even if a policy is lapsed/closed at the time of claim, it could lead to rejection – right?
And yes, I haven’t done that mistake. While taking HDFC Life, I disclosed about SBI Life. Although I was about to close SBI policy after taking new one. All thanks to JI.
Prasoon
All what matters is did you disclose the “active” policies at the time of taking the new policy or not .. It does not matter if the old policy is active or not at the time to claim !
Salute to you for replying almost everyone.
Disclaimer – I am not your blind follower. And I believe many readers are not as well. Because to follow properly, one needs to keep his eyes open. (Hope someone got the point)
Prasoon
If you are not my blind follower, I would consider that you really got what I preach 🙂 , It has to be exactly like that 🙂 . Be your own master when it comes to personal finance atleast !
Dear Manish,
I had taken a personal loan of 1L on which there is an insurance of 2L valid till this december . I Opted for ICICI term plan in August2011 and did not declared that 2L insurance as I was not aware of it at that time. When started learning Finance I came to know about this while looking Documents. They Deducted Rs300 for this insurance.:-(. is this going to be problem???
Regards,
Amol
Amol
If the 2L insurance is going to end in few months .. then let it go .. but you should have declared it !
Thank you!
Hi Manish,
I wanted to know, whether I should declare about the lapsed policy also?? While declaring about the old policies .
Ganesh
No , you dont have to mention your Lapsed policies!
Thanks Manish for the quick and prompt reply!!!
Hi Manish!!
This article about declaration of old policy is an eye opener!! I too have not declared about the old policy. Thanks for this article. It will help lot of people, who have not declared about the old policies like I did.
Best Regards,
Ganesh
Ganesh
Good to know that you now understand this point .. go act on it !
manish,
thanks for good article..
I had taken religare increasing term plan in 2009, with SA is 30L (5% increase PA) for premium of 10456/-
recently , i had seen that online iterm plan,it had cover up to 75 years of age which is good one as compare to last one which is up to 60 yrs age only
i purchased new iterm plan with 1Crore cover for premium of 8934/-
policy is issued with in 10 days. even medicals also done in home it self.
service is good..i delcared the old policy also…
1) i am planning to close old one, if i don’t pay premium will it be lapse automaticallay, or should i give the request to close ?
2) if policy due date is 31-mar, and paid premium in Apr month with in the grace period, can tax claim will be in new FY or it goes to old FY ?
thanks a lot manish, after reading your articles only , i had educated financially much, i considered repurchase decission after your article “Should you repurchase a new Term Plan ?”
— Rama
Rama
Good to hear that …
1. If you stop paying the premiums, it should close automatically , but I would suggest putting a formal request also .
2. Thats is really tricky question , better ask it on our forum : http://jagoinvestor.dev.diginnovators.site/forum/
Useful information.
When i was asked about this information, when i was taking a term plan few years back, i was also apprehensive and did not provide full information.
Subsequently, i inquired and found that this is mandatory. On further digging I understood that this will be useful for the insuring company to estimate the liability. This info can also be used by the insurer, as a preliminary check, if there is any attempt to defraud the company.
I was told that many insurers allow 15-20 multiples of yearly income as an approximate yardstick for total insurance cover.(Whether it is correct/sufficient is debatable).
However, it is better to disclose the information beforehand so that claim is not delayed/denied due to that issue.
Srinivas
Yes ..thanks for your comment on this topic
really nice article, and such a scene is seen many a times around us. we should make people aware of it. thanks
Thanks for your comment Sahil
Hi Manish,
It’s an eye opener for every individual looking to buy life insurance. However, what about in case of medical insurance. If some one is planning to buy a mediclaim policy from a new co. and also already has some cover from another co. does he need to inform the new co. about the old policy.
Vinay
Yes .. the same thing applies to Health Insurance also !
Manish – Good one Manish. Finally a compelling reason to surrender Endowment plans for people who have taken a Term plan reading forums like JI but are still clinging on to those endowment plans!!!
Justgrowmymoney
Not sure how surrendering the Endowment plans will help here .. what matters is what you did at the time of taking the new policy , and not what happens at the time of claim , if you think that by surrendering the endowment plans, they will be left with just a term plan and that will negate the “non-disclosure” sin they did, that is wrong .
I do not agree that it is essential to declare the Sum Assured of my previous policies while buying new policy. It is good to have but not MUST thing. As long as, I am able to pay premiums to ‘n’ number of policies regularly while I am alive, the companies should not bother about the Sum Assured I had opted for, in the past. Someone thinks he is worh 50 lacs, others might think they are worth 1 Crore and so on. I am open to take as many policies and cover and it is individual insurance company/IRDA’s responsibility to get all the essential infomation while issueing any new policy. If they do not give that importance to verify the SA from previous policies then it is obviously not that important. The example you have given from the (dumb) serial Crime Petrol is not related to this at all. The person in the serial intentionally got himself killed to showcase it as Murder when it was kind of ‘suicide’ as it was his will. Hence, the isurnace company and court must have denied his claim. You have blown this small thing out of proportion and your blind followers pushed panic button.
Jaywant
Not sure how to react on your comment. Its a little funny to read that you do not believe it , but your belief has nothing to do with reality, because Disclosing your old insurance policies while taking a new policy is a MANDATORY rule as per life insurance companies and if not done, it can lead to claim rejection as its a “Material Fact”, and thats exactly what happened in the serial (Crime Petrol) too .. It was just an example .. there are several real life examples . You can also verify this information from any insurance company . Why do you think that I am kidding ?
Also , you need to know that an individual can not take any sum assured life insurance, there is a limit to it . A person earning 5 lacs per year can not take 10 crore worth of Sum Assured, it will be rejected. Thats because Life Insurance principles does not allow a person to BENEFIT in profit because of life insurance claim amount, its just to cover the risk .
Manish
Hi Manish,
If someone has a life insurance from the corporate in which he is working. What should be done in this case. I too have a life insurance from my company in which i work. I don’t pay any premiums for it. My company pays for it.
Thanks
Akshay
You dont need to declare it !
Hi Manish
One question. Is it necessary to declare policies taken only from other companies or policies taken from same Insurance company ? In case of latter case the company should know it themselves rather than make it mandatory for customer to declare it ..
Thanks
Ashwin
One has to declare all the “active” policies at the time of taking any new policies, from same or other companies, that does not matter
Manishji,
Excellent write up. !!! As a financial advisor, every agent of Life Insurance should ask his client for his existing policies and should submit the information with new proposal wherever necessary. This is safer side for client and the agent as well..!!! Some agents avoid to mention existing policy as the information differes from their new proposal. Any way, every Life insurance agent has to be very much cautious on this issue as it relates to client benefits.
Yes Jignesh
If all the advisors start doing it, it would be great !
Good Article…. I have declared the old insurance policy while buying new policy
But i could not understand from your article…how this data is used by insurance company…means if i declare my old policy, how it affects my current policy….is there any change in cover amount? or any chances of approving insurance prposal or anything else…pls explain
Sushil
As per Insurance principles, one should not be using Life insurance for Profit , it should only be used to cover the risk of your future earning. thats all .. So if your life insurance requirement is say 1 crore (by logic) , then suppose you have already taken a cover of 1 crore, then ideally you should not get any more life insurance, so if you declare this fact to the new company , they will reject your application and not provide you more cover, which is fair !
But if you do not tell them, then you can again take 1 crore policy and like this , may be you can take 10 crore policy from 10 difference companies (1 crore each) . this is againt life insurance principles .
Manish
… so Manish even if a person has not declared any previous policies and at the time of claim if it turns out that his total claim is less that the max limit (as per life insurance principles) then will he (his family rather) be given the claim? Ie:- all this rule of declaring previous policies is just to ensure that the max is not crossed is it? Or its mandatory and would be simply rejected if the person is not declared any previous policies?
Pramod
Yes .. this rule is to make sure that you do not cross your limit at any point of time . At the time of taking the policy , if you had any running policy and you didnt declare it, thats the problem , does not matter if later you stopped that “undeclared policy” . While we are now getting into extreme and in reality things might not get this much ugly ,we are talking about the rules and how the insurance thing works and what are the principles its based upon !
Very well explanation….Thanks
i have group term insurance policy from my organisation.
do i need to mention this while i buy a term insuarance?
Dear Nitin, the personal policies should be disclosed not the group cover provided by employer.
Thanks
Ashal
No
Dear Manish
This is for you ,please clarify my point that non dis-closer of insurance history is material only if claim occurs withen three years,after that insurance company can’t deny their liability.
JS
there is nothing like that .. that 3 yrs point is only for non-material fact like spelling mistake or some thing which does not affect your PREMIUMs
Hi Manish,
I took LIC pension plan ‘jeevan suraksha’ 10k/anum first(it is still active) around 8 years ago later i had brought term plan from pvt insurer(offline policy) around 4 years ago, As for as i know i was never asked by agent to declare the old policy, Infact when i brought term polcy i was having other insurance like endowment,ULIP but i closed those policy 3 years ago.
I have never declared these policy to current term plan insurer including closing of some of those policy will these have any effect on future claims?
Vivek
Did you have any insurance in that Pension plan ? I dont think so , because you need to mention only LIFE INSURANCE policies which are active at the time of taking the policy
I bought Term plan from LIC (Jeevan Amulya), I have declared all my active policies, but after reading this blog I checked my form (xerox with me) and in that they required all the policies (active or closed within 3 years). but I did not give detail about closed policies. So can they reject claim and if Yes, then can I add my old closed policies?
Non-declaration is a serious violation actually . I suggest telling them now .. They should be able to incorporate it now
Sir-
Last year i.e in Mar 2011 I have purchased two ULIP policies of HDFC Life and Birla Sun life.The name of the policies are (i)HDFC SL CREST (Highest NAV gurantee)(ii)BSLI Platinum Advantage plan (Highest NAV guarentee).The yearly premium is Rs 25000.I paid only once for both the policies.I have purchased both the policies before coming to your contact.Now regularly I am reading the article of Jago Investor and also purchased the book “JAGO INVESTOR”.The sum assured in these policies are 250,000 in HDFC and 175,000 in BSLI.In view of the above please advice me, as I want to discontinue both the policies.Shall I get at least my original amount after five years.
Hasan
You will only get the market value of your investments , depending on where it was invested . Read the policy documents for exact rules
Dear Manish
Really this is eye opner information for me.
Few month ago i take a term plan from SBI for me & a ULIP plan from HDFC for my wife but agent not asked us for previous policy.
So please help me that how cant i add my pre. policy detail to these co.
Can i take a action against agent.
Thanks & regards
Shyam
Shyam
It was not an agent responsibility to ask that .. You were suppose to make sure you read the policy document and also verify the forms
But why do these companies need the details of my past insurance policies in the first place?
Very True…
Even I asked reason/legal requirement for the same…but still question is open in forum…
Further, the given case (Sandip – Crime Patrol) is a case of willfull misconduct on part of insured person…probably that why claim is rejected.
Thanks
As per Insurance principles, one should not be using Life insurance for Profit , it should only be used to cover the risk of your future earning. thats all .. So if your life insurance requirement is say 1 crore (by logic) , then suppose you have already taken a cover of 1 crore, then ideally you should not get any more life insurance, so if you declare this fact to the new company , they will reject your application and not provide you more cover, which is fair !
But if you do not tell them, then you can again take 1 crore policy and like this , may be you can take 10 crore policy from 10 difference companies (1 crore each) . this is againt life insurance principles .
Dear Manish
I agree with the fact that insurance should not be used as a mean of profit. Insurance is a contract of Utmost good faith.
Here what i want to say that life insurance requirement (future earning) is a subjective matter…for some companies it may be 15 times of your annual income for some may be 20 times or for some it may be 10 times only….
Let say, an insurance company provide life cover of 15 times (say 1.20 Cr. considering annual income of 8 lakhs) of your annual income. Mr. X has taken life cover of 80 lakhs from this company and he has coverage of 20 lakhs from some other company, which is not disclosed while taking coverage of 80 lakhs…..Can the company reject the claim? Probably the answer is “NO”…
What I can conclude, if you has devised insurance to gain something, then probably insurance company can deny your claim, otherwise no…
Thanks
Vipin
Yes .. but mostly the companies are not bothered till 20-25 times of your annual income ..
Sir,
I purchase Kotak preffered policy, but their is no column for existing policy detail. Agent tell me that their is no need only policy if I purchase from KLI information is need. Can I add my prior policy detail after issuing policy.
Sharad Gupta
Sharad
Your agent has not guided you well or he himself is not aware of the rules, in all the forms for life insurance, there is a place where it asks for existing policies or atleast the total SUM ASSURED you have , you can contact customer care and ask them
Hi,
I was applying got ICICI Prudential iCare term insurance, and saw this in the final page terms and conditions:
12. The maximum benefit payable on death, excluding the Accidental Death Benefit under ICICI Pru iCare Option II, in respect of all policies issued on the same Life Assured will be limited to the maximum Sum Assured applicable for this product. The additional Accidental Death Benefit payable under ICICI Pru iCare Option II in respect of all policies issued on the same Life Assured will be limited to Rs. 5,000,000.
What does this mean?
Example:
I have 20 lacs Sum Assured from other policies
I buy this policy with Sum Assured 50 lacs
Does this statement imply that if there is a claim, only 30 lacs will be paid?
Hi Raj
Here confusion is that ‘All Policies’ issued by ICICI or any insurer?
Further, clause is saying only about maximum sum payable…there is no denial of claim.
Thanks
Yes, All policies or ICICI is one confusion. But if the say max is 50 lacs, and you are getting 20 lacs from your other policies, so we will pay you only 30 lacs! This will be unfair, as the premium charged was for 50 lacs.
Denial of claim is not the issue I raised.
Dear Raj, the clause is meant for ADDBR (accident rider) & not the basic cover.
Thanks
Ashal
No, it is meant for basic cover too. Read again!
Dear raj, please read the lines from your own post –
The additional Accidental Death Benefit payable under ICICI Pru iCare Option II in respect of all policies issued on the same Life Assured will be limited to Rs. 5,000,000.
Thanks
Ashal
The first line is for normal death coverage (excluding ADB), and the second line is specifically for ADB (if you have taken it).
Raj
There is no relation with any other policies you have bought , In case of death , you will get 50 lacs
good finish to the debate manish
Can you please let us know other issues like this which we are not aware off.
Hi Manish,
Very good point, I was aware about this and hence had declared existing policy, however here is what the questions were in the questioner
1. Do you have any existing Life Insurance cover that you bought from ICICI Prudential Life Insurance Company Limited in the
last 5 years/ or have made any similar application for Life cover with ICICI Prudential Life Insurance Company Limited?
If yes, please provide details:
*Terms of acceptance (decision) Standard, Revised premium, Postponed, Declined, Offered with modified terms.
Policy Number/ Application No. Basic Sum Assured (in ) Policy Decision*
Total Amount (in )
Yes
13063384 5000000
5000000
Driving Licence PAN Card
Standard
Full Name
FIRST NAME SURNAME
2. Date of Birth 3. Gender
4. Relationship with Life to be Assured
2. Do you have any existing Life Insurance cover that you bought from any other company in the last 5 years?
If yes, please provide details:
C. Nominee Details
1. (Please leave a space between each part of the name)
5. Address of Nominee (to be filled if different from life to be assured’s communication address)
*Terms of acceptance (decision) Standard, Revised premium, Postponed, Declined, Offered with modified terms.
the first question is about any existing policy from ICICI and i declared it, however the second question was do you any life insurence policy that youhave taken in last 5 years, i didnt declare my other policy as the the question was only in last 5 years, i do have two policy for 10L sum assured but was taken 6 years ago. so my question is do i have a problem here? additionally i have closed the 50L icici policy that i had after taking this 1CR term policy .
Vikrant
In that case you dont have to worry , as you have done everything as per what they asked
I did the same. I answered “No” because my other policies were more than 5 years old. There was no place to enter valid policies that are more than 5 years old.
I thought I am done, but this clause in final place looks scary:
As per terms of the policy, if it is found that you have existing policies which has not been disclosed during the application process, then due to increased sum assured the Company can cancel the policy subject to the provisions of Section 45 of the Insurance Act, 1938.
Even though this is a glitch (or intentional??) from ICICI Pru side, and technically I am correct, I don’t want my family to run around courts. So I emailed them, and they told to send scanned self attested copies of other insurance. I did that and got an acknowledgement from them that they have received details of all my other policies. I have printed out everything and kept it with the policy documents.
I would say Manish, please let people know by editing your article so that they are clear from their end.
Raj
Ideally they should not be bothered with your old policies because they themselves are asking only last 5 yrs policy details, but what you told looks like a contradiction to what they want .. anyways .. safer than ignorant 🙂
Hello Manish
I have 2 active term policies from SBI at the moment, and they both are linked. ie. I see the details of both the policies when I login using my username. I guess that is enough proof to suggest that the bank is aware of them.
My question to you is:
I had 1 policy from Bajaj Allianz and Ulips from ICICI. I had bought them before I had enough financial maturity. I stopped them midway, when I realized that they are no good to me and are currently inactive (since more than 5yrs now)
Is it important to also declare these lapsed policies while purchasing a new policy? Pls guide.
Vinod
Did you take both those policies at the same time or not ? Because you always need to declare “active” policies . Regarding lapsed policy , some companies ask for policies taken in last 5 yrs
Excellent write-up. Quite informative. As a reputed Financial Advisor, we always insist on getting & filling details of previous insurance policies while submitting proposals for a fresh insurance insurance. Hence, the clients are always assured of timely & total settlement of claims, if any.
Good to hear that Rajiv .. keep it up !
Dear Manish,
Thanks for this great info! When taking the HDFCLife (clickToProtect) they asked me if I had/have any previous life policy. I had mentioned only my LIC (term) that is anyways expired. Btw, I would like to mention that this HDFCLife seems to have a very bad service. I applied on the first week of Apl and have still not received it!! Inspite of repeated calls/emails also. A complain number filed to their customer care number is also taking time. I don’t know if anyone else is also faced similar issues…
-Promod
Pramod
thanks for sharing your experience with HDFC LIfe
Hi Manish,
Action taken: I have just bought a term insurance from Aegon and have shared my existing LIC policy details with them. Even though I am about to surrender my existing LIC policies, I still have mention the same to them (just to be safe).
However, I dont understand the need to do so. specially when they have not asked about it. Can you please clarify?
Rgds,
Jassi
Jassi. Insurance is never taken for making profits although some people try to do such things. One of my friend works with LIC as development officer and he shared with me how people have hidden intentions to make profits from insurance companies. So if you are a genuine investor you disclose what you are already have. It makes your intention clear nothing else.
Hi,
Just a small update to all readers of this discussion!!!
I am in the midst of purchasing a term policy – Aegon.
Section 3 of the policy application form has details where one needs to fill in Active policies of the past 5 years.
I had ignored the same thinking that we need to declare only previous TERM policies. However, reading this article, I have taken corrective action. I have declared my current active LIC policies(which anyways I am about to surrender, but they are active as of date) also.
I am sure each company would have such a section. So please fill in the details very carefully. 🙂
Rgds,
Jassi
As per my information,this fact to declare all insurance policies is material only if the claim is raised within 3 years of issuance of policy,after three years no insurance company can deny claim for non dis-closer of other insurance policies.
Interesting fact if true…
JS
No , this is a material fact and even after 3 yrs , it will be used as the basis of rejection, who told you that after 3 yrs, there can be denial because of this fact ?
Hi Manish –
When I took one term insurance from a private player 3 years ago even I didn’t declared my other policies which were taken earlier . Can I call up their customer care now and update them about this.
Also I have taken a new online term insurance this year itself. Do I again need to tell them about this new policy which I have taken this year.
Regards,
Jatin
Jatin
You need to talk to their customer care and tell them about existing policies before taking that particular policy
What about group term insurance policy? Does that need to be declared?
In many companies, there is a group term insurance policy in effect. Does the group-insurance-policy need to be declared while taking personal life insurance? My agent told me that group insurance policy need not be declared. I would like to hear if somebody believes otherwise.
Dear Sambaran, the insurer wants to know the policies purchased by you & not the group plans provided by your employer.
Thanks
Ashal
If so mandatory means insurance companies should have a proper network that all the life insurance policies should be interconnected with the common database of an individual name. Other wise this is an unwanted burden to the customer, even though he paid the premiums regularly and not declared the old policies, may be his ignorance.
Dear Girish, Sample the below example –
SA 5L Rs. term plan from LIC as you have faith for high claim settlement ratio of LIC.
SA 1.25C Rs. term cover from a pvt. insurer.
Now the claim happens & your family files the basic claim with LIC to get speedy claim process & file to pvt. insurer with copy of the basic docs + the declaration from LIC that some of the original papers are retained by LIC itself for claim procedure.
Interestingly you had not told pvt. insurer about this LIC term cover. This is suppression of facts & the pvt. insurer ‘ll deny the claim. Interesting isn’t it?
Thanks
Ashal
Girish
Yes .. it might be the case that one has no idea about it , but in Law , ignorance is not an excuse, how do you prove your ignorance ? What if I knew about the rule and didnt honour it and said “I didnt knew”
Hi Manish
I am not able to understand, whether the requirement of declaring old policy from IRDA or it is just a rule framed by insurance companies?
If a person paying regular premium (assuming all other factor constant), is it legal to deny the claim by insurance company on the ground that other policy are not declared?
Thanks
i also have the same doubt. why there is a need to declare old policies? please clarify manish
Dear Vipin, Say your income is 5L Rs. yly & you are purchasing a term cover of 75L Rs. if you do not have other policies, chances are insurer ‘ll issue the policy as the Sum assured to income multiple is around 15. the moment it crosses 20, Insurer ‘ll look it with suspicion & may not underwrite at all. Just from that TV show example – Life insurance should not be a profit venture arising out of the death of a person.
Thanks
Ashal
Thanks Ashal
What I can colclude from your reply is that I am at the mercy of insurance company to decide my sum assured. Further, can insurance company deny my proposal on the basis that Sum Assured in > 15 times of anual income?
As last, my question remains still open. Is it IRDA guideline or just rules framed by insurance company?
Thanks
Dear Vipin, No it’s not like that you can’t purchase beyond 15 or 20 times multiple. all said that for a normal person, the insurer ‘ll take care of the fact that there should not be a situation that due to high sum assured for example 500 multiple, the person’s life is in danger.
Thanks
Ashal
What about updating the old policy with information of new policy?
Assume I have policy A.
Later I take policy B, with complete declaration about A.
Do I need to modify ‘A’ telling that I have taken policy ‘B’?
Sambaran
Dear Sambaran no need to disclose to your prev. insurer as the new policy is taken after the prev. policy & there is no suppression of facts by you.
Thanks
Ashal
Ashal, thanks for your reply. Do you have any IRDA/some-such clause handy which supports your answer?
Dear Sambaran, honestly speaking, I do not know any clause of IRDA to support my reply. Whatever I have written above is from interaction with persons in Insurance sector & my own understanding.
Thanks
Ashal
Sambaran
There is no rule like this that you need to update the OLD company , It does not make sense from Insurance policy . A new company needs to know about the OLD policy because in their underwriting procedure , they want to make sure that you have not take more than enough insurance already .
Manish
Hi Manish,
Will there be any effect on the status of my application for the new policy if I declare my last policy, say for example I have a 1 crore life insurance policy and plan to take another 50 lakh policy from the same company or from a different company. Will my application be rejected or will the premium increase..
Further if its that much mandatory why there is no such column asking for any declaration of any previous policies. What is the mode of communicating to the present company that I had a policy from such and such company ..is there any documentation done for this..
Please clarify my doubts.
Dear Anurag, normally only the name of insurer & the sum assured is asked for prev. policies. Depending upon the income level, current total sum assured, insurer may not under write your new policy.
There is space available in each & every application form no matter you are applying for a term plan, ULIP or Traditional plan.
Thanks
Ashal
Hi,
I did not mention my old policy because it was elapsed,it that ok?or that also need to be mentioned here?
Dear Phani, if the old policy was already in lased condition on the application date of new policy, you need not to disclose it as you were with out cover.
Thanks
Ashal
Dear Ashal
When is a term policy said to have been lapsed? i.e. how many days after the non payment of premium is the policy said to be lapsed
dr kishan
Once the grace period is over (generally 15 days to 30 days) , you can assume it to be lapsed, mostly you should also get a mail etc from company too
Sir I have a car policy from icici lombard ihave take a claim on it next time I am change the policy to bharti axa my car met an accident the company settesettelled it cash loss but after some time they says that u take no claim bonus from us so ur claim Will defuse what can I do sir to receive my claim
Hi Manish,
Is it that any insurance taken should be declared when you take a new insurance of any kind?
For example, I have Jeevan tarang & I have an another LIC policy paying Rs.2250/quarterly (have to check the name of the policy), this means if i take any term insurance i will have to declare these two?
I havent declared about the 2250/policy while taking Jeevan tarang 3 years back. Should i declare it now?
Need some clarity on this please.
Regards,
Arun
Arun
Yes .. its mandatory to disclose your old policies else your claim amount will not be given . Do it now
Does this include Personal accident policies from General & Health Insurers too? As i just signed up for HDFC Click2Protect plan, however, i have not disclosed my Personal accident policy.
Pradeep
No , Only Life INsurance policies need to be disclosed when you take another Life insurance policy
Cool, I have disclosed all my Life insurance policies and also, when sending the self attested documents, i have sent my other policy certificates (self attested) too.
Pradeep
Thats great .. you have done the full proof work !
Hello Pradeep,
Is it important to submit the policy certificates (self attested) for HDFC click 2 protect. ???
I didn’t see such requirements while applying.
I uploaded income proof , address proof and ID proof.
Loordhu,
No, it is not compulsory.
My aim was to make the decision making capacity of the under writer easy and to show the applicant is disclosing all material facts correctly and is very honest in his declarations.
Hope the above helps.
Pradeep
Hello Manish,
Thanks for your information.
Yesterday I took online term plan from HDFC.
I declared my old policy details life sum assured and permanent disability sum assured.
But they have not asked any details about policy number and provider name.
They required only sum assured.
Thanks
Loordhu
Loordhu
Yes .. thats fine .. they mainly need the sum assured only
Hi Manish
Is there any way to know if we have mentioned any policy
i have policy with Tata Aig , Birla sun life and LIC
how to get information on this, please guide
Thanks
Sanjay
Sanjay
Which was the last policy you took ? Call the customer care and ask them that you want to know if you have declared old policies or not . they will guide you on how to add those policies incase you have not !
Thanks Manish
I tried it to LIC for confirmation, they told me to go to the adviser or at branch Office
Ok , in that case you will have to visit the LIC branch to update the information
I don’t remember whether I have declared it or not, now if I want to do so, what procedure I should follow?
Gajanan
Which was the last policy you took ? Call the customer care and ask them that you want to know if you have declared old policies or not . they will guide you on how to add those policies incase you have not !
Hi Manish
I have a question here. Do we need to also declare any non-life insurance policies while taking life insurance policies? I am talking about Home Assure policy, Accidential policy or Mediclaim policy.
Please confirm.
Thanks
Dear Manish, Its good information for everyone who is planning to take any Life Insurance policy. I will request to give complete details of Do’s and Don’ts for taking a Term Plan. It will help me as I am planning to take a term plan from 2 diff companies.
Vikas
Enough is written on term plan on this blog .. search for those articles , you will get full idea .. all i would say is dont lie about anything while filling up the form
and how can i come to know i have i declared it or no…
Sunil
Which was the last policy you took ? Call the customer care and ask them that you want to know if you have declared old policies or not . they will guide you on how to add those policies incase you have not !
LIC some long years back…
But i have not seen any company asking for the same… in this case.. what if u have 3 policies from 1 company.. and u have put all the 3 policies under 1 user name.. that way the company would know it anyway…but good i have come to know it now and will take care in the future…
Sunil
Mostly the companies ask the sum assured you have at the time of taking the policy .
but nobody asked me…
Sunil
Its clearly asked in the form which you sign at the end . And signing it means , you agree to what is written !
All companies have a fixed format of application for insurance. So How you can declare the things which are not asked?
Not all companies have same format . SOme ask for last 5 yrs smoking , some ask for smoking in your overall life
Some ask for any policy rejection in last 1 yr, some do not ask for this at all .
What I was trying to say is, all companies have a fixed format (each company might have different set of questions). But how can one declare something which is not part of an application form??
Say I want to take insurance from company X. Now when I fill application form, they ask 100 questions and I reply to all with best of my knowledge. But nowhere in those questions, they ask for the existing policies. How to declare such things if not covered in the questionnaire?
Ankur
Which company form did you fill and didnt see this question ? If it was not part of questions , then its fine . But ideally all the insurance companies ask for it . I am interested to know the company name .
I am not talking about any specific question. I am just asking – How one can declare a thing which he feels may be relevant but is not asked??
Hmm.. in that case you should talk to customer care of the company , they will tell you how to add additional information in a policy !
Good One. Yes i have declared most of the policies i own.
Many a times, Companies ask for Latest policy. using this Policy, i guess they get the deatail of other policies.
I agree that we should furnish every details you have.