Question

Insurance companies usually add a _ at the end of proposal form to be signed by proposer

Answer 1

Insurance companies usually add an User Information usage clause at the end of proposal form to be signed by the proposer.

Explanation:

• A user information usage clause is a clause in the document of agreement which states that the person who is opting for a particular insurance scheme will have to provide,the Insurance company,information which may include,in case of health insurance,his daily life routines,his health conditions and anomalies,his current medication and diseases,his alcoholic consumption details and some other information relevant for the insurance company to calculate their own chances of incurring any losses on providing that person an insurance policy.

• For example,Lets say,Mr. X  decides to opt for a particular health insurance policy for his future benefits.Now,before signing the policy deeds and documents the insurance company asks him to provide his health details such as whether he is on any medications,his mental and physical health conditions(such as depression,anxiety,etc.),his daily work-life balance,food habits and asks him to allow them to monitor his daily life routines.

• Now,it is the choice of Mr.X to provide them with such information or not,the insurance companies only do so just to calculate their own chances of losses in-case Mr.X provides wrong information about his health and acquires some disease in the future which may put him in life or death situation.
• This would enforce the legal agreement signed by the two and the insurance company will have to pay for his medical expenses.

• In case of Manufacturing companies/firms/organisations,Insurance companies add an "Average clause" at the end of the agreement which states that the insurance company will evaluate the value of closing stock according to its own methods if the goods are lost abnormally(Fire,theft,etc.)