Life Insurance: Is your life insurance claim completely secured after paying premiums for three years? Section 45 of the Insurance Act says something that every policyholder should know. Know what happens in the first three years of taking a life insurance policy, and what changes after that.

Uncategorized

Life Insurance Claim: Life insurance is not just a way to save money, but it is a strong means of financial security for you and your family. But when it comes to claims, many questions arise in people's minds. A common question is that if we have paid the premium continuously for three years, can the insurance company refuse to give the claim? Especially in plans like term insurance, where the sum assured is large, this question becomes even more important.

What does the insurance law say?

The answer to this is found in Section 45 of the Insurance Laws (Amendment) Act 2015. According to this, if a life insurance policy has been in operation continuously for three years, then after that the insurance company cannot challenge that policy for any reason.

According to a report by Policybazaar, this provision came into force after the amendment in the Insurance Act 1938. No life insurance policy can be challenged after the completion of three years.

When is the three-year period counted?

This period is counted from the date of commencement of the policy, commencement of risk, reinstatement or addition of any rider, whichever is the latest. This three-year period is called the Contestability Period. During this period, if the insurance company feels that any important information was hidden or given incorrectly while taking the policy, then it can investigate the claim and can also reject it if needed.

Highlights of Section 45

After the completion of three years, the insurance company cannot challenge the policy on any basis, whether it is wrong information or any fact has been hidden. In the first three years, the company has the right to check the information given by the policyholder and if any discrepancy is found, it can reject the claim. But after three years, it is possible to reject the claim only if the company proves that deliberate fraud was committed, which is legally very difficult.

What can happen in the first three years?

According to Section 45, within the first three years, if the insurance company feels that the policyholder has hidden any important information or given wrong information, then it can reject the claim. During this time, the claim can be stopped on the basis of fraud or concealment of facts.

If the claim is rejected, will the premium be refunded?

If the claim is rejected in the first three years and fraud is not found, then the company can refund the premium. But if fraud is proved, the premium can also be confiscated.

Therefore, as important as it is to buy an insurance policy, it is equally important to understand its terms and conditions. After paying the premium continuously for three years, your claim is considered secure. But it is very important to provide complete and correct information in the first three years. With correct information and timely payment, you can provide financial security to your family.