Life Insurance — Nature, Principles and Scope Events insured against life, life insurance

A young engineer in Kharghar buys a term plan, names his wife as nominee, and two years later dies. The insurer's letter arrives in a month: claim rejected, because he did not mention that he smoked. His mother wants to know whether a company can do that after collecting premiums. To answer you need three things: what kind of contract a life policy is, who is entitled to the money, and how far the insurer can go in refusing a claim. The Insurance Act 1938 answers all three.

In two minutes

A life policy is a contract to pay an agreed sum on a contingency dependent on human life, governed by good faith; the money goes to the policyholder, an assignee or a nominee as sections 38 and 39 provide, and section 45 limits when an insurer can repudiate.

The rest of this chapter

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