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What is a Proposer In Insurance? - All You Need To Know

What is a Proposer In Insurance

To understand the insurance policy document, it is essential to know the meaning of several terms of life insurance. Some terms used for individuals under a life insurance policy are the insured, the proposer, the insurer and the beneficiary. Read ahead to know the meaning of the terms to make informed decisions while buying a policy.



Proposer in Insurance

The proposer is an individual who proposes to initiate a life insurance policy with the insurance provider. The person either buys the policy for himself/herself or for another individual in whom the person has an insurable interest.

So, a proposer is a person who submits the request for life insurance coverage. The proposer is also called a policyholder and is liable to pay premiums. To better understand the meaning of proposer, you should also know the meaning of the following terms:

  • Insured/life assured: Life assured is the person covered against risks by the insurance policy.

  • Insurer: The insurer is the insurance provider for the life of the insured. The insurer analyses the risks, offer coverage and pay out the claims.

  • Beneficiary: The beneficiary is the receiver of the death benefit of the insured.


What is Insurable Interest?

Insurable interest implies that the proposer of the policy either gains from the survival or suffers a financial loss due to the death of an insured person. For example:

  • A housewife may have an insurable interest in her spouse.

  • A dependent father may have an insurable interest in his son.

  • An employer may have an insurable interest in the employees.


The Difference Between Proposer and Life Assured

The proposer and the insured in a life insurance policy are either the same or different individuals. The proposer is the applicant, owner and payer of premiums under a policy. Whereas insured or life assured is the person whose life is covered. Thus, the proposer doesn’t need to be insured under the policy purchased.

For example: If you buy a policy in your name, you are the proposer and the insured. But, if you wish to purchase a policy in the name of your spouse or child, you are the proposer, while the spouse/child will be the insured. But it is you who will bear the cost of the policy in both cases. So, the proposer handles the premiums under a life insurance policy irrespective of the insured.



What is the Role of the Proposer in Insurance?

The proposer is the essential person under a life insurance policy who plays the following roles:

  • Initiates the policy purchase by filling out the proposal form.

  • Decides the coverage, premium, sum assured, etc., for the life insurance policy.

  • Decide the names of the beneficiaries under the policy.

  • Pays the premium for the life cover.

  • Can change the name of the beneficiary or other aspects of the life insurance.

  • Can cancel the policy.


Proposal Form in Life Insurance

Proposer in Life Insurance

Once the proposer decides to purchase a life insurance policy, he/she has to fill out the proposal form. A proposal form is one of the essential documents in life insurance. It helps the insurer to seek information about the life assured.

Apart from details about age, name, gender, address, etc., a proposal form asks about the medical history, income, and occupation of the insured person. The details provided are used for underwriting by the insurance company. Underwriting is the process under which the insurance company assess risks and eligibility for life insurance cover.



Change of Proposer Name In Insurance

The proposer in life insurance can be changed when the proposer dies, or the insured minor turns 18 years old. This is when the insured and the proposer are different individuals. Upon the proposer’s death, the policy’s ownership is usually transferred to the life assured or the person named in the proposer’s will. To make changes in the ownership, a “change in ownership” form has to be filled out to inform the insurance company about the new owner of the policy.



Important Questions Related to the Proposer in Insurance

  • What if the policy proposer dies in life insurance?

    If the proposer is the insured person under a policy, the beneficiary receives the policy benefit after the proposer’s death. But when the proposer and insured are different, the person in the proposer’s will becomes the policyholder.

  • Who claims life insurance tax* benefits?

    In the case of insurance for self, the insured person pays the premiums and claims the tax* benefits. The insurance proposer can also claim the tax* benefits if the policy is bought in the name of another person.

  • Why is life insurance essential?

    So, if you are concerned about what might happen to your loved ones after you, buying a life insurance policy is the solution. A life insurance policy takes care of your loved ones in your absence and offers the following benefits:

    • Provides death benefits in the form of a lump sum or regular payments.

    • Provides financial stability.

    • Helps your family pay off debts.

    • Helps meet the wedding or educational expenses of your loved ones.

    • Offers retirement benefits.

    • Offers tax* benefits.


  • Conclusion

    Now you know about the proposer’s details in insurance and the benefits of a life insurance policy. So, you must consider buying a suitable life cover for yourself or your loved one.

    To secure your family’s future and fulfil your dreams, Tata AIA Life insurance has brought a range of life insurance plans. With several riders#, you can tailor the life insurance policy plans, such as term plans, according to your needs. You can also select the payment option between single, limited or regular. So, buy life insurance online with Tata AIA and provide protective financial cover to your loved ones.



    L&C/Advt/2022/Jul/1648

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Frequently Asked Questions

Who is the proposer of life insurance?

The proposer is the one who pays the premiums of a policy. If a husband buys a policy for his wife, he will be the proposer and pay the premiums.

Should I buy life insurance?

If you have dependents and you are the primary provider, you must buy life insurance to ensure your dependents are looked after. Life insurance is also essential if your debts outweigh your assets.

Why should I take a term plan with no returns?

Term plans give you a high sum assured with lower premiums than other plans. So, they are worth investing in to secure your family financially.

Disclaimers

  • Insurance cover is available under the product.

  • The products are underwritten by Tata AIA Life Insurance Company Ltd.

  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.

  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.

  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.

  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.

  • #Riders are not mandatory and are available for a nominal extra cost. For more details on the benefits, premiums and exclusions under the riders please refer to the Rider Brochure or contact our Insurance Advisor or visit our nearest branch office.