Health Disclosure During Life Insurance Purchase: A real life example


Many a times people purchasing life insurance policies, do not take care to fill the health declaration form seriously or they themselves want to declare but the Agents do not disclose properly. How this mistake can prove your loved ones costly in your absence, you ‘ll understand after going through the next few lines below.

The Background- Mr. Pradeep Dumbu, one of the member of our Facebook Group shared his own experience related to health disclosure while purchasing a Life Insurance Policy.

Quote – I belong to a village in Andhra Pradesh. My father was an Investor in Sri Ram Chit Funds. Later on the chit collection agent sold an endowment policy from Sri Ram Life Insurance Company of Sum assured 100000 Rs. to My father in 2006. At the time of filing the application form, my father told the agent that He is diabetic for past 20Y but the agent told that it’s not an important issue & as the sum assured was small, no Medical test was carried & policy was issued. My father were paying the prem. regularly. Last Year my father died & when me & my mother filed claim, the Insurance Company denied the claim, stating the reason that Father’s Health Condition of being Diabetic was not disclosed at the time of purchase of the policy. What should I do now to get our insurance amount from the insurance company?

Unquote- All of us now can understand that Insurance company is not honoring even a small claim amount of 100000 Rs. & being an endowment policy, the overall deal is not that much in loss to Insurance Company. Still this real life incident teaches us a valuable lesson. What can be the impact of wrong or understated health declaration while purchasing a Term plan where Prem. is very less & the Sum assured is very high?

What’s your take now on reporting your & your family’s health condition & history while purchasing a life cover? Please share your learnings in the comment section below.

4 Responses to Health Disclosure During Life Insurance Purchase: A real life example

  1. Kapil Tiwari says:

    As a matter of principle, one must declare one’s own health status as well as family history of diseases. One must come forward for whatever medical tests are required. I see two advantages in this:
    1) The chances that the insurer may deny claims is minimised
    2) Having declared honestly, one does not have to carry the burden and the fear of a lie
    Thanks, Ashal, for these lessons that you give in small doses; they register well in the mind effortlessly. So, by reading your blogs of the last two days, I know that:
    a) one must always go for a term plan in insurance
    b) one must always make full and truthful declaration of one’s medical status.
    These principles are ’empirical’ in nature and should be adhered to, come what may. Easy 🙂

  2. Hitesh says:

    Dear Ashal,

    We should mention the actual health conditions while filling up the forms so that we can be tension free during claims.

    Even in my case, some 5yrs back, when even i was a typical person who use to sign the blank form and leave it upto to the agent to do the rest, in one of my term plan insuring me, i had told my agent that my father is a diabetic and my mother has a high blood pressure.
    Now after reading regular articles on jago investor and asan ideas, i realized to fill the form by ourself to avoid supressing of facts.
    After i referred my form filled by my agent 5 yrs back and found that he has mentioned good health for my parents.
    Now what should i do ? Should i stop the current term plan of 25 lacs with LIC or go and tell Lic about the incident ?



    • ashalanshu says:

      Dear Hitesh, thanks for sharing your problem. To overcome the issue, please write an application informing the same to LIC branch office about the correct Health declaration for your parents. In case LIC underwrites your policy with a loaded prem. please accept the same. In all probability, as the policy is 5Y old, the prem. loading may not happen at all. Please inform LIC about this disclosure as soon as possible & in the same application do complain about your agent that originally you had provided the info to you agent but he (not you) supressed the fact. Please demand an action also against your LIC agent to teach him & all other fellow agents a lesson for future handling of the similar cases.



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