Don’t be trapped by an inadvertent omission of details when taking an insurance policy
People say you should never lie to your lawyer and doctor. But seldom do we think about what happens if we lie to our insurer. If there is one virtue that insurance thrives upon, it is trust and you will have to pay a heavy price for hiding facts from your insurer.
Consider the case of life insurance. The two major aspects people tend to lie about while applying for one are their health status and family income. The insurer has every right to know these aspects of your life as they are crucial in determining the premium and cover that you will be entitled to. Human life value, which is the basic premise on which the sum assured is arrived at cannot be compromised with false details, as doing so could not only result in denial of the policy – it could also result in claims getting delayed or denied.
People tend to hide the unpleasant realities of their health conditions while applying for health insurance. Say, if your family has a history of heart problems, there is high probability that you may develop one over the course of time. But hey! When you are literally putting your trust and money in the hands of your insurer in good faith that they will take care of your monetary needs when misfortune comes in the form of hospital bill, it is foolish to hide these significant details from your insurer.
Not disclosing existing state of your vehicle, even if is a minor dent or scratch on its surface, is not the right way to go about while applying for motor insurance. Some even tend to hide the details of the ownership of their vehicle, which again is an invite for trouble when you finally make a claim.
It is very important to be specific about your belongings that while you apply for a Home insurance. It is the tiny details which make a home complete and likewise, it is the tiny details which make your home insurance complete. Since home insurance covers a wide range of objects, it is important to give the specifics. Suppose you are insuring a TV, make sure its model number, age and so on are correctly mentioned. Likewise, instead of quoting that half kilo gold is to be insured, be specific as in the number and kinds of jewellery you are getting insured.
With many countries like US, UK, and all Schengen countries making travel insurance mandatory, it is very important that you don’t lie about your health status and the destinations you are planning to visit. After all, you don’t want to be cross with the insurer who vows to stand by you even if you lose your passport or baggage during your foreign travel, especially if you are in the wrong country.
So the bottom line is, as in life, when it comes to insurance also, honesty is the best policy. The fundamentals of insurance rests on the principals of utmost trust so do not lie when it comes to going in for a policy.