The proposal form is a standardized form. The proposal form is a type of an application form, which a proposer has to fill all the relevant details about the life to be assured. The agent has the proposal form with him provided by the insurer. There are different types of policies and so the different types of proposal forms are there. It has the entire details regarding the duration of the policy, type of plan, mode of payment, etc. A proposal form is to be to be completed by the proposer in his own handwriting and signed in the presence of the agent. The proposal form contains a declaration at the end, to ensure the authenticity of the information given.
Usually the proposal form contains the following information to be filled by the prospective insured:
- Name of life assured
- Date of Birth
- Name of the employer (if any)
- Sum assured of the proposed policy
- Number and age of the family members
- Family medical history
- Proposer’s Medical history
Besides these there are other related forms regarding health, occupation, the agent’s confidential report and many others. In addition there is a consent letter which shows the consent of the life assured to the imposition of some clause or extra premium, duly signed by the life assured.
First Premium Receipt
The agent provides the proposal form and other related documents and the underwriter examines the form and other documents and then determines the terms on which to accept the risk or reject the same. The consent of the person assured is obtained in the form of payment of premium. After receiving the payment, the insurance company issues the First Premium Receipt, which acknowledges the proposal of the life-assured. It contains all particulars of the policy. It has the details of the next premium to be paid. The policy bond is sent within 45-50 days from the date of first premium receipt to the life assured. The First Premium Receipt is an important and powerful document on the basis of which the lifeassured can ask the insurer to issue the policy bond, which is treated as Evidence of the Contract of Life assurance.
After issuing the First Premium Receipt, the next step is that of the insurer of sending the policy bond to the life-assured and this document is also known as Policy Contract, which is the ultimate evidence of the life-assured. The Policy Contract contains all the terms and conditions of the contract between insurance company and the life assured, duly stamped as per the Indian Stamp Act. The policy is sent to the life assured by the insurer. The policy contract contains the details of the insurance such as duration of the policy, the type of policy, sum assured, premium amount and the date of maturity, extra premium, nominee, assignee etc.
If the insured is unwilling or unable to pay the premium of the policy, he may surrender the policy and ask for its surrender value. Surrender value is the cash value payable by the insurance on voluntary termination of the policy contract by the life assured before the expiry of the term of the policy. Surrender value depends on the type of policy and number of premium paid. A policy can be surrendered only when the premium is paid for the three years.