Friday, June 27 2025
Source/Contribution by : NJ Publications

When it comes to health, we all want the best care for ourselves and our family. Medical expenses are rising quickly and unexpectedly, having a good health insurance policy is no longer a luxury-it's a necessity.

Insurance policy is an agreement(contract) between the insurer (insurance company) and the insured (policyholder). It is based on the information the insured provides in the proposal form, making it the most important part of the entire contract (agreement). An insurance company offers a policy on the basis of a proposal form and other information related to the insured. It seeks all the relevant information from the policyholder in order to underwrite the risk.

The proposal form includes

• The insured's basic information such as address, age, name, education, income, etc;

• Occupation, medical history, lifestyle habits like smoking / drinking, etc;

Still, many people make mistakes when buying health insurance. These mistakes can lead to policy/claim rejections, inadequate coverage, or even policy cancellation. This article will help you understand how to avoid some common mistakes. Whether you're buying health insurance for the first time or reviewing your current plan, these tips will come in handy.

In-appropriate practices

Some of the most important points while filling proposal form.

1. Consult an Insurance Expert

With so many policies in the market, it's easy to get confused. Many people buy policies just because a relative or bank executive recommended it-not because it fits their needs.

Take the help of a qualified insurance advisor. An insurance expert will:

• Understand your health needs, age, and family size

• Recommend plans with suitable cover, benefits, and premium

• Explain terms & conditions in detail

• Help you compare plans from different companies

This small step can prevent a big mistake.

2. Disclosure of Medical Condition, Lifestyle habits honestly

When filling out the application, be completely honest about your health history. Disclose any past or current illnesses, surgeries, injuries, or regular medication. Insurance companies measure you based on your current and past health information provided in the proposal form.

Insured members must inform about his/her lifestyle habits like the consumption of alcohol, tobacco and other drugs. Addictive/intoxicating substances such as tobacco & alcohol have a negative impact on health.

Insurers also check for inconsistencies in the proposal, telecalling along with medical reports. They (Insurers) also verify the proposal form details with diagnostic reports or insured's remarks on the phone call.

Many times, people do not disclose their current health condition, recent medical diagnosis or ongoing investigations in the proposal form so as to obtain better coverage for lower premium or to avoid the waiting period or rejection.

If they(insurance company) find out you've hidden anything important, they have the right to reject your claim-even if the illness is unrelated to what you've hidden. Hiding any important information may result in your policy being cancelled as well.

For example, Mr. Raj was hospitalised for treatment of a heart ailment, the insurance company from the hospital sources came to know that he had diabetes before taking insurance policy and as a result the claim got rejected. This is because he did not mention diabetes in the proposal form while buying the policy. Therefore, complete medical history must be given in the medical questionnaire asked in the form.

3. Understand the Moratorium Period

The moratorium period means after continuous completion of 5 years from inception of your first health insurance policy, the insurer cannot question the validity of your policy based on non-fraudulent errors or non-disclosure.

It's different from the waiting period (when some diseases aren't covered), but it's equally important. Once this period is over, your claims are far less likely to be rejected due to errors made while buying the policy.

So, buy your policy early and continue it without breaks. That way, you complete the moratorium period sooner and enjoy stronger comprehensive protection.

4. Don't Ignore the Fine Print - Verify the Policy Document

Once your policy is issued, verify the details in your policy document thoroughly. This includes:

• Name, age, and details of all insured members

• Health declarations made during the application

• Policy start and end date

• Sum insured (risk cover amount)

• Waiting periods, exclusions, sub-limits

If there are any mistakes or missing details, get them corrected immediately. Don’t wait or delay till you need to make a claim.

Final Thoughts: Secure Your Health, Secure Your Future

Health insurance is not just a formality-it's a financial safety net. Buying the right policy means you don't have to worry about hospital bills during a crisis. It means your savings remain safe, your family stays protected, and you can focus on recovery, not expenses.

Health is uncertain, but your financial preparedness doesn't have to be. Act early, choose wisely, and avoid the mistakes that many regret later.