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"When filling in proposal forms, you must disclose all material facts within
your knowledge" |
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What is insurance?
When you buy an insurance policy by paying a premium to an insurance company, you
enter into a contract with the company, and the company undertakes to pay you a
fixed sum of money on the happening of an event.
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What are the types of insurance?
There are many types of insurance to protect you from all kinds of risks but the
two most common types are life insurance and motor insurance.
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What is a third party policy / comprehensive policy?
These policies refer to motor insurance only.
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Third Party Policy - If you drive a car and knock into B's car, under third-party
insurance, your insurance company will be liable to pay for B's death / injuries
and damages to B's car only.
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Comprehensive Policy - If the same thing happens and you have a comprehensive policy,
you are covered for B's death / injuries and damages to his car and also damages
to your own car.
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What do I do when I fill in a proposal form?
When filling in proposal forms, you must disclose all material facts within your
knowledge. A material fact is one which will influence the insurer to either accept
or reject your proposal. |
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In life insurance, facts of your health and occupation are material facts. In motor
insurance, your accident record is material. |
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What if the insurance agent makes mistakes or fills in the wrong particulars? Even
if this happens through no fault of yours, the insurance company can reject the
contract. So always read what is filled in very carefully. |
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What is a cover note?
When you pay your first premium, the agent issues a cover note as a temporary protection
while the company decides whether to cancel or accept your proposal. It expires
either after the expiry date on the note itself or when your proposal is rejected
or when the company issues the policy. |
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What should I do when considering buying a policy?
Always read and understand all the terms and conditions of the policy. |
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Do not be pressured into taking a policy by the insurance agents. Only do so if
you know what the policy is about and if you need it. However, you must under the
law have motor insurance. |
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Once you have such a policy, you must be punctual in the payments of your premiums.
If you take too many policies, the company may be suspicious and may cancel your
policy. |
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What do I do when I meet with an accident?
Inform your insurance company in writing within 14 days of any loss or damage. When
there is a police case against you and you are summoned to court, do not plead guilty
but inform your insurance company about this at once. |
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If not, the company may not be liable to indemnify you when there is a claim against
you for damages to the other person's vehicle. |
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Points to ponder |
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Do you have a motor / life insurance policy? |
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Have you read the terms and conditions of the policy? |
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Did you know that you are bound by the numerous terms and conditions? |
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