Life insurance is a contingent contract that gives protection with investment. This life insurance policy is taken for the protection of the family of the insured. The insured is entitled to recover the full amount mentioned in the policy on the event of death or attaining a certain age. In life insurance, the event is bound to happen sooner or later.
The steps for how to take life insurance policy are given below:
- Filling a form Proposal- The first step to take out a life insurance policy is to fill a form and all the details are to be furnished. Like the name, address, birth date, age, the object of insurance, etc.
- Medical Examination- After submitting the proposal form next step is to undergo a medical examination regarding his health and to fill in a personal statement in the presence of a doctor. The doctor examines the person and gives it’s reported to the company whether life is average.
- Accepting the proposal- After receiving the medical examiner’s report, the insurance company will consider the report and if the applicant’s information is satisfactory then the company will ask the applicant will give the notice to pay the first premium. As soon as the first premium is paid, the life insurance contract is completed and the applicant will become policy holder.
- Proof of age- The policy holder is required to give proof of age with the proposal form. If the insured does not furnish the proof of age then the policy will be not valid.
- Payment of premium- Premium is paid by insured to the insurance company either in a lump sum or in easy periodic installments. Usually, a grace of days is given to pay the premium and if the premium is not paid within the days of grace, the policy may lapse under certain conditions.
- Commencement of risk- After the payment of the first premium the risk commences and the proposer becomes insured.
- Issue of policy – After completing all the formalities the insurance company prepares the life insurance policy and send it to the insured. And the policy is a document that contains all the terms and conditions.
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This article is written by Vartika Chandwani and edited by Rupreet Kaur Dhariwal.