Deepak YohannanMyinsuranceclub.com
The insurance agent is a persuasive character. At the best of times, he helps you find a great insurance policy while also doing the running around for you —fetching the form, submitting it, and later, helping you or your dependents file a claim and receive payout.
However, despite their glib talk, insurance agents also make mistakes, and some of them are downright unscrupulous. For instance, many insurance buyers boast, “Oh, buying insurance was a breeze.
Also read: Why is mis-selling so prevalent in insurance sector?
My agent filled out my form and everything.” But really, your agent should not be filling out your form at all. The following paragraphs will explain why.
What If the Agent Makes a Mistake?
The insurance policy requires specific details about YOU. The insurance agent, even if he is a family friend, may not know all your personal details.
A life insurance policy, for instance, asks detailed questions about your and your family’s health. Rather than trust your agent’s limited knowledge about your life, it is recommended to spare 15 to 20 minutes to fill out the form correctly.
Sometimes, the agent may even misspell the names and contact details in the form. The onus is on you to ensure that such errors do not occur.
What Is the Agent’s Motivation?
The agent could make an honest, unintended mistake, or he could wilfully fudge information on your policy form. The latter is not as rare a phenomenon as one might think.
Sometimes, the agent is so eager to convert the lead (you) into a customer, that he intentionally omits information. For instance, he might avoid mention of pre-existing diseases or the fact that you are a smoker.
His motivation is to ensure that the policy application is not rejected and that the potential customer is not scared off by a hike in premium.
What Are the Dangers of Filling in Incorrect Information?
The most obvious danger is that of claim rejection. For instance, your agent may have stated that you are a teetotaller, when in fact you are an occasional drinker.
Now if the insurer finds out about this within two years of the policy being in force, it could reject or not recognize the claim. In the case of life insurance, this could deal a tremendous blow to your beneficiaries because they no longer stand to receive the insurance payout. Furthermore, the money you paid as premiums will have gone to waste.
What if Your Agent Has already Filled the Form?
If your insurance agent has already filled out the form, your responsibility is to check for errors and misinformation. Typically, you should ask for a photocopy of the application form so that you are aware of the data thereon.
Once the policy bond reaches your home, you have another opportunity to look through the details and contact the insurer in case of errors and omissions.
However, agents sometimes write their address as the current address so that the policy bond reaches them rather than the customer.
Unscrupulous agents do this to ensure that the customer views the policy bond after the free-look period has passed. This again emphasizes the need for customers to fill out their own forms.
The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal.
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