What is the Role of a Proposer in Insurance?

Who is a Proposer in Insurance?

A proposer in insurance is the person who applies for and purchases the insurance policy by filling out the application form and paying the premium. This person may buy the policy for themselves or for someone else, such as a family member or dependent. For example, if you purchase a life insurance plan for yourself, you are both the proposer and the life assured. However, if you buy a term insurance for your spouse or child, you are the proposer, while they are the life assured.

The proposer is responsible for applying, providing all necessary details, and paying the premiums. They are the primary point of contact between the insurer and the life assured, ensuring the insurer receives accurate and complete information.

Roles and Responsibilities of the Proposer in Insurance

The proposer plays a very important role in life insurance while buying the policy. They start the policy and give all the needed information. Their roles and responsibilities include:

1. Selecting the right policy: The proposer chooses the type of insurance, coverage amount, policy period, and other features.
2. Submitting the proposal form: The proposer in insurance fills out the proposal form and shares details about the life assured with the insurance company.
3. Providing accurate information: It is important to provide complete and accurate details, including both their own and those of the life assured. Any false information can lead to rejection or cancellation of the policy. If something changes, such as an address, health details, or contact number, it is their responsibility to inform the insurer.
4. Understanding the policy terms: The proposer should carefully read and understand the policy’s terms and conditions, including what’s not covered, any waiting periods, and how to make a claim. This helps prevent confusion and makes the claim process efficient
5. Paying the premiums: Premiums must be paid on time. Missing payments may cause the policy to lapse, resulting in a loss of coverage and benefits.

The key responsibility of the proposer in an insurance policy is to ensure the policy remains valid and operates smoothly.

When Does a Proposer Become a Policyholder?

A proposer in insurance becomes a policyholder once the insurance company approves their application, the first premium is paid, and the policy document is issued. From that moment, the proposer is known as the policyholder for the entire policy period, as long as they continue to pay the premiums on time. This means they officially own the insurance policy and can receive its benefits.

Conclusion

Understanding who a proposer is and what they do makes the insurance process easier to follow. The proposer starts the policy, gives important information, chooses the coverage, and pays the premiums. Their role helps the policy get approved and work smoothly, protecting both the life assured and the policyholder. Whether it’s a term insurance plan or any other life insurance plan, knowing what the proposer in life insurance does builds trust and helps you make better choices.

Frequently Asked Questions

1. What happens if the proposer dies while the life insurance policy is in effect?

   If the deceased proposer and the life assured are different people, the ownership of the policy will pass to the heirs of the proposer. If the proposer is the life assured then the death benefit will be paid to the nominee as per the policy records. In both cases, the insurer needs to be notified of the death the proposer.

   
   

2. Can the proposer and nominee be the same?

   Yes, in some cases, the proposer and nominee can be the same person. For example, if a person buys a policy for their spouse, they are the proposer and can also name themselves as the nominee to receive the coverage amount, if applicable.