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Understanding the various roles involved in insurance is crucial for making informed decisions. One key role is that of the proposer. The proposer is the person who applies for an insurance policy and is responsible for providing accurate information to the insurance company. This article delves into the significance, responsibilities, and implications of being a proposer in an insurance policy.
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Proposer meaning in insurance, refers to the person initiating the policy or the person looking to buy the policy. The proposer is usually the policyholder, as he/she is the one responsible for paying all the premiums for the policy. However, the proposer can be different from the life assured, as a person may buy a policy for their parents, child, or spouse. It is important for a proposer to give all the information correctly, as discrepancies in the details provided can result in a claim rejection in the long run.
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The proposer is responsible for the following:
Primary Provider of Information: The proposer works directly with the insurer by providing them with accurate information that can help them assess the risk and offer the right premium and cover amount for the life assured.
Decides the Details: The proposer decides all the policy details like the cover period, cover amount, type of insurance, and benefits opted within the policy.
Premium Payment: The proposer in insurance is responsible for all the premium payments and keeping the policy active.
A proposer in insurance becomes a policyholder once all the details, forms, and the required premiums are submitted and the policy is issued. When the policy documents and all the details are finalised, the proposer is thereon referred to as the policyholder.
Providing Accurate Information: A proposer's primary responsibility is to provide accurate and complete information to the insurance company. This includes personal details, health information, and any other relevant data. Misrepresentation or withholding information can lead to the rejection of claims or even the cancellation of the policy.
Selecting the Right Policy: The proposer must carefully choose the insurance policy that best suits their needs or the needs of the insured. This involves understanding the different types of policies available and assessing coverage options, premiums, and benefits.
Payment of Premiums: It is the proposer's responsibility to ensure that the premiums are paid on time. Failure to do so can result in the lapse of the policy, which means loss of coverage and benefits.
Understanding Policy Terms: The proposer should thoroughly understand the terms and conditions of the policy, including exclusions, waiting periods, and claim procedures. This helps in avoiding misunderstandings and ensures smooth processing of claims when needed.
Updating Information: If there are any changes in the information provided at the time of policy issuance, such as a change of address or occupation, the proposer must inform the insurance company promptly.
The proposer can either buy the policy for themselves or for another person with an insurable interest. In the first case, the proposer becomes the life assured. In the second case, the person with an insurance interest becomes the life assured. In both cases, however, the proposer in insurance is the policyholder and, hence, is responsible for the payment of premiums.
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If the proposer is the life assured under the policy, the assigned nominees will receive the benefit on his/her death. If the two are separate individuals, ownership shall be transferred to the legal heir mentioned in the will of the proposer.
The proposer holds the ownership of the policy. Therefore, if the proposer and the life assured are different individuals, ownership can only be transferred upon the death of the proposer. Usually, the proposer will have assigned a new owner in his will prior to death. For this purpose, you can fill in the insurer’s ‘change in ownership’ form and transfer it to the life assured. If the life assured is a minor, the newly assigned proposer shall hold the ownership of policy till the child comes off age.
Here is a list of important terms you should know while learning about the proposer in insurance:
Proposer - He/she applies for the life cover and pays the premiums for the policy.
Insurer - This is the insurance company that will offer the life cover.
Life assured - This is the person whose life the insurance policy will cover.
Beneficiary - This is the individual who shall receive the death benefit on the death of the life assured.
The proposer in insurance is one of the most important individuals as he/she directly provides information to the insurer and is responsible for the premium payment. If the information provided is wrong or if the proposer misses a premium payment, it could lead to a claim rejection in the long run.
Note: It is suggested to calculate the term plan premium on the term life insurance calculator online tool by Policybazaar before buying.
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
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