Important Of Proposal Form In Insurance Contract.

 Today we are going to face the Important Of Proposal Form In Insurance Contract. A proposal form is one of the most relevant document required for a life insurance contract which subsides between the insurance company and the insured. It is desirable for speed. Covenience and accuracy in handling offers to be insured. Also the insured basic information like age, occupation, name, address, e.t.c can be traced in a proposal form.

Definition of a proposal form:
A proposal form is a document which is drafted by the insurer and which seeks answers to the main material aspect of risk. It is a questionire calved to draft material information pertaining to the risk to be insured. It is very important to note that a proposal form helps the insurance company to analyze the basic risk inherent in the discharge of premium to the insured by making a proper calculation of the potential risk involved.

Functions of a proposal form.
1. Proposal form serves as a basis for advertisement: most if not the proposal form bears the name of a specific company and may contain details of the cover available under the companies standard policy for that type of insurance. most company also list another type of policies which they underwrite. By such act alone, awareness is created.
2. Proposal form provides basis for insurance contract: A proposal form contain a declaration the the proposal is the basis of the contract and the insured wants the truth of the answers contained therein. so that any illegality is breach of contract and renders voidable.
3. A Proposal form makes it easier and more reliable for underwriters to elicit fact that will enable them in the risk assessment to know wether to accept or reject cover and if they are to accept. on what terms and conditions.
4. A proposal form helps in risk calculations.

Structure of a proposal form:
A proposal form contain the following
a. General question
b. Particular question
c. Declaration
d. Signature and Date.

General Question: this are questions mostly found in majority of proposal forms, irrespective of the class of insurance and they includes such a question as proposers name, proposals address, risk address, proposals occupation and loss history etc

Particular question: this are questions specific to the type of insurance being proposed, and relating to hazards concerned. particular question includes the following questions as use of building and there value, age, occupation and medical history of the life to be assured, employees annual wage roll, their members and grouping, etc

Declaration: The declaration is always seen towards the foot or end of the proposal form. It is to the effect that the proposal is the basis of the contract, and the the proposal will accept the insurers