Term Insurance Proposal Form: The Disclosure File Buyers Should Preserve
Reviewed by CA Nikhil Gupta · Last reviewed 7 June 2026
Why the proposal form, medical declarations, income evidence and benefit illustration form the most important term-insurance claim file.
For broader context, see the Investing, Loans and Personal Finance Hub.
The proposal form is the insurer’s record of what was asked and answered. A buyer who never receives a copy cannot later prove that the agent selected an incorrect answer.
The proposer is responsible for truthful and complete answers even where an intermediary assists.
Health, occupation, income, habits, existing insurance and family history questions can affect underwriting.
An insurer-arranged medical examination does not automatically replace disclosure duties.
The issued policy and Customer Information Sheet should be checked against the proposal and acceptance terms.
What the policyholder should understand
- The proposer is responsible for truthful and complete answers even where an intermediary assists.
- Health, occupation, income, habits, existing insurance and family history questions can affect underwriting.
- An insurer-arranged medical examination does not automatically replace disclosure duties.
- The issued policy and Customer Information Sheet should be checked against the proposal and acceptance terms.
- Errors should be corrected during free look or immediately after discovery.
For the connected rule, example or next step, see Term Insurance Claim Delay: Documents Families Should Prepare.
The five-point review
| Check | What to examine |
|---|---|
| Health | Diagnoses, symptoms, tests, medicines, consultations and hospitalisations. |
| Lifestyle | Tobacco, alcohol, hazardous activity and travel/residency where asked. |
| Occupation/income | Work risk, earnings and financial justification. |
| Existing cover | Policies, pending applications, declines and adverse terms where asked. |
| Copies | Proposal, attachments, OTP trail, medical reports and acceptance. |
For the connected rule, example or next step, see Term Insurance Claims: Why Claims Get Delayed or Disputed.
Practical example
An adviser completes a digital form and marks ‘non-smoker’ to obtain a lower premium, although the buyer disclosed occasional smoking in chat. The buyer signs by OTP without reviewing the PDF. At claim, the insurer relies on the proposal. The chat may help, but the correct control was to review and correct the form before issuance.
How to apply the framework
Treat proposal completion like signing a legal declaration. Ask for a PDF before authorising submission and retain the final version. Where a question is ambiguous, add a written explanation rather than guessing. Disclose another insurer’s decline or loading if asked. Do not assume the insurer will retrieve all records from a medical database.
After issuance, compare policy, sum assured, term, premium mode, riders, nominee and underwriting conditions. Read the CIS and benefit illustration. Use the free-look process for material mismatch. If a later error is discovered, notify the insurer in writing; silent continuation can worsen the evidence. The best claim defence is a contemporaneous record of full disclosure and insurer acceptance.
Action checklist
- Complete/review every answer.
- Attach explanatory disclosure.
- Save the submitted PDF.
- Keep medical and income evidence.
- Check issued terms during free look.
- Correct errors in writing.
Evidence to keep
- Proposal and attachments
- Medical tests
- Income/occupation evidence
- Agent communications
- Policy/CIS and acceptance
Warning signs
- Blank or pre-filled form
- OTP requested before review
- Smoking/medical history minimised
- Existing policies omitted
- Buyer receives no proposal copy
Finin2min takeaway
Insurance outcomes turn on the contract, the facts and the evidence trail. Preserve the proposal and policy, obtain written decisions, calculate the disputed amount, and use the insurer, Bima Bharosa, Ombudsman or legal route that fits the issue.
For the connected rule, example or next step, see Insurance Free-Look Period: The Cooling-Off Window Buyers Forget.
Frequently Asked Questions
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Insurance
- Official starting point
- irdai.gov.in
Page source links
- Department of Financial Services—insurance laws and rules
- IRDAI Master Circular on Life Insurance Products, 12 June 2024
- IRDAI Master Circular on Protection of Policyholders’ Interests, 5 September 2024
- IRDAI insurance products and policyholder resources
- IRDAI consolidated and Gazette-notified regulations
- IRDAI circulars and master circulars
- Policyholder protection master circular