The Life Insurance Corporation (LIC) of India will not only relaunch its insurance plans from December 1, 2019 after incorporating the provisions of new guidelines issued by IRDAI, but will also revise its proposal forms. Compared to existing proposal forms, the new forms will be comprehensive and lengthy.
For example, Proposal Form 300, that is used to insure self life by adult applicants, currently contains 8 pages, including Agent’s Confidential Report / Moral Hazard Report and NEFT Form, while the revised form will contain 11 pages excluding the Agent’s Report and NEFT Form.
The revised proposal forms will be divided into 4 sections. In Section I, details of the proposer / life to be assured to be filled, while in Section II, information about the proposed plan has to be given. Section III will contain details of personal and family health and habits and Section IV will contain the declaration by the life to be assured / proposer.
The details of the proposer / life to be assured in Section I will contain stringent KYC norms akin to equity investments including details of tax residency. Even IDs of Nominee(s) and in case of minor Nominee, name, signature and ID proof of Appointee will now be needed.
In Section II, details of the insurance plan, which will be taken for the life to be proposed has to be mentioned including details of the riders, if applied for. If applied for term plan Jeeven Amar, details of smoking habit, whether to take level or increasing sum assured (SA), etc are also to be mentioned.
Section II will contain direct question on various diseases like those asked in the proposal forms for health insurance. In the revised form, not only the cause of death of diseased parents / siblings will be asked, but will also seek information if anyone in relation to the life to be proposed has ever suffered from or died of heart disease, stroke, high blood pressure, diabetes mellitus, cancer, kidney disease or any hereditary disorders, Insanity, or any contagious diseases such as tuberculosis, hepatitis, AIDS / HIV etc. If yes, name of the disease, relation and date / year of detection of the ailment will have to be mentioned.
In the declaration part in Section IV, unlike 3 signatures at present, the life to be assured / proposer has to sign in 7 places as lot more declarations are to be made in the up coming revised proposal form.
The agents will have to file his/her Confidential Report / Moral Hazard Report on quality of the life of the life to be assured separately, which is currently an integral part of the proposal form that the proposer / life to be assured may also see, which undermines the confidentiality of the report.
Thus, for the relaunched plans, the LIC of India will accept only the revised proposal forms from December 1, 2019.