What is the Meaning of Proposer in Insurance?
A proposer in insurance is an individual who buys a policy from the insurance company. The policy is purchased by the proposer either for themselves or for any other individual in whom the proposer has an insurable interest.
Insurable interest refers to the loss that a proposer may suffer if anything happens to the person or the property for which they have bought the insurance policy. A proposer is responsible for making premium payments for the policy.
Key Terms Related to Proposer
- Insured: An individual or an object that gets protection against a specific loss is known as the insured. A proposer can be, or may not be, an insured individual.
- Insurer: Any organization or institution that provides coverage against a specific loss is called an insurer.
- Nominee or Beneficiary: In a life insurance policy, a nominee is an individual who gets financial coverage or death benefits in case of the insured’s demise.
Example to Understand Key Terms
Let’s understand all these terms with a simple example.
Suppose Mr. Ajay buys an insurance policy for his 55-year-old father, Mr. Raghav, from Max Life Insurance company.
In the above scenario, Mr. Ajay is the proposer as well as the nominee who pays the premium, Mr. Raghav is the insured, and Max Life Insurance is the insurer.
How Proposer and Insured are Different from Each Other?
A proposer can be, or may not be, an insured of a policy. A proposer is an individual who buys insurance from the insurance company. Let’s see how the proposer and insured are different from each other.
| Proposer in Insurance | Insured in Insurance |
|---|---|
| A proposer buys a policy from the insurance company and pays the premium. | An insured gets coverage or protection against uncertainty and risks. |
| A proposer can also be a nominee of the life policy. | An insured cannot act as a nominee of the policy. |
| In the event of the proposer’s demise, no benefits are paid. | In the event of the insured’s demise, death benefits are paid to the nominee of the policy, who can be the proposer or any other person. |
| Tax benefits can be availed by the proposer as they pay the premium of the policy. | An insured cannot avail of tax benefits if the premium is paid by the proposer. |
| Proposers must have some sort of income source to ensure seamless payment of premiums. | It is not necessary for the insured to have an income source. |
How Do We Change the Name of the Proposer in Insurance?
The name of the proposer can be changed in the insurance policy in the event of the proposer’s demise or when the insured attains the maturity age. Moreover, the proposer can also assign a new proposer before their death. The insurance company has to be informed in order to change the proposer in the insurance policy. They will demand certain documents, such as a "change in ownership form," to get the name of the proposer changed in insurance.
Conclusion
We have understood the role of the proposer in a life insurance policy. Being a proposer, it’s important to choose the right policy for the insured that provides appropriate coverage. As a proposer, you can compare various plans and choose the one that is best suited to the needs of the insured.
Book a free call with a PolicyX expert
5-min consultation · No spam · No pushy sales
- Step 1 of 3
- Step 2 of 3
- Step 3 of 3
Compare Life Insurance Companies
Pick any two insurers to see a detailed side-by-side comparison.
Other Life Insurance Companies
Explore other top life insurers in India.