Question

24 yash was diagnosed with a kidney infection a few years ago and also has a family history of kidney failure. he applied for a basic critical illness (ci) insurance policy through his agent viraj. viraj visits yash to deliver his policy and during his visit, yash mentions that he was primarily seeking coverage for his kidney issues and is glad that the contract is delivered. however, viraj is aware that the contract does not cover kidney disorders. what should viraj do?
a. viraj should inform yash that kidney disorders are not covered under the policy as per the contract.
b. viraj has no obligation to inform yash as it is yash’s responsibility to fully read and sign the final contract.
c. viraj should advise yash to cancel the current policy and reapply for a 20 - condition contract.
d. viraj should not deliver the contract and send it back to the underwriting department for modification.

Explanation:

In insurance, agents have a duty of disclosure and ethical responsibility. Viraj knows the policy doesn't cover kidney disorders, and Yash is under the impression it does. Option a is correct because Viraj should inform Yash about the coverage exclusion to ensure Yash is aware of the policy terms. Option b is wrong as agents have a responsibility to disclose material facts. Option c is not necessary as the question is about the current policy's delivery and disclosure, not changing the policy type. Option d is incorrect because the contract is already ready for delivery, and the issue is disclosure, not modifying the underwritten contract.

Answer:

a. Viraj should inform Yash that kidney disorders are not covered under the policy as per the contract.