What is Proposer in Insurance? Check All Details

Are you curious to know how insurance works and who's behind making it happen? Well, this guide is here to answer all your questions about the person called a "Proposer" in insurance. Many of you might confuse a proposer with life assured but both of them might or might not be different. 

So, with the help of this guide, let us help you understand who proposers are, what they do, and the important differences between a proposer and life assured. 

What is Proposer in Insurance?

Proposers are responsible for giving complete details about themselves or the thing they want to insure. Later, the insurance company uses this information to decide if they'll say yes to the proposal. And, if they do say yes to the proposal, the insurance provider also has to identify the cost involved. 

So, a proposer is essentially the one putting in the request for life insurance coverage. This person, also known as the policyholder, is obligated to pay premiums. The proposer holds significance in the insurance process because the insurance company relies on the information they provide to determine whether to offer coverage or not. 

Who is a Proposer in Insurance?

When we talk about a "Proposer" in insurance, we're talking about the person who wants to buy an insurance policy. He/she is the one who suggests getting insurance coverage from a company.  In other words, we can call them as potential policyholders.  It's important to note that proposers might be getting an insurance policy for themselves or someone they care about.

Who can Propose Insurance?

Any person or business entity having an insurable interest in any other person can propose that the risk should be covered by an insurance provider. Here, insurable interest refers to the financial loss on the unfortunate demise of the insured.

Example: A son is the only one bringing in money, and his parents rely on that income to survive. Here, parents have an insurable interest in their son's life. Similarly, if a housewife depends on her husband's income, she has an insurable interest in his life. And, likewise,  businesses have an insurable interest in the lives of key employees.

When Does a Proposer Become a Policyholder?

Proposers become policyholders once the insurance company accepts their insurance proposal, they make the first premium payment, and the insurance policy document is issued. After these steps, the person is officially known as the policyholder throughout the policy term, as long as they keep up with their responsibility of making premium payments.

What are the Responsibilities of a Proposer?

Below are the roles and responsibilities of the proposer in insurance:

• Completing the Proposal Form and starting the policy application process
• Determining the coverage amount, premium, sum assured, and other details for the life insurance policy
• Choosing the beneficiaries for the insurance policy
• Handling the payment of premiums
• Requesting changes to the beneficiary's name or other aspects of the life insurance
• Initiating the cancellation of the policy, if necessary

What is a Proposal Form in Life Insurance?

When you decide to buy a life insurance policy, you need to complete a proposal form. This proposal form is an important document as it allows the insurance provider to gather information about the person whose life will be insured.

In addition to basic details like age, name, gender, and address, the proposal form also requires details relating to the insured person's medical history, income, and occupation. The details provided in the form are then used by the insurance company for a process called underwriting. 

Underwriting is when the insurance company evaluates risks and determines if the person is eligible for life insurance coverage.

Change of Proposer Name In Insurance

Essentially, the proposer of insurance is the owner of the insurance policy. If the proposer and the insured person are two different persons, the ownership can be transferred but only after the death of the proposer. Moreover, to facilitate this transfer, the proposer needs to have specified a new owner in his/her will before passing away.

If you need to change the name of the proposer in an insurance policy, you can do so by contacting your insurance provider and making a request for the change. 

NOTE: The insurance company might ask for specific documents to process the name change. 

What's the Difference Between Proposer and Life-Assured?

In life insurance, the person applying for the policy and the one being covered can be the same or different individuals. The one applying, known as the proposer, is essentially the applicant, owner, and the person responsible for paying the premiums. On the other hand, the insured or life assured is the individual whose life is being protected by the insurance policy. This implies that the proposer doesn't have to be the person covered by the insurance.

For instance, if you get a policy in your name, you are both the proposer and the insured. However, if you decide to get a policy for your spouse or child, then in that case you are the proposer, and they become the insured.

Conclusion

It's highly important to understand the role of the proposer in insurance. The proposer is the person who initiates the insurance process, provides necessary details, and takes on responsibilities throughout the life of the insurance policy. Whether it's deciding on coverage, paying premiums, or suggesting changes, the proposer plays a vital role in securing life insurance coverage.

Frequently Asked Questions (FAQs)

Ques. What does a proposer do in insurance?

Ans. The proposer is the person who wants to buy insurance. He/she fills out forms, decides on coverage, and handles responsibilities like premium payments.

Ques. Can anyone propose insurance?

Ans. Yes, individuals or businesses with a financial interest in someone's well-being can propose insurance coverage.

Ques. What are the responsibilities of a proposer?

Ans. Proposer responsibilities include completing forms, deciding coverage details, choosing beneficiaries, paying premiums, and managing policy changes.