I have inadvertently filled a few wrong details in the life insurance proposal form, which I now realise after a year. Will the insurer cancel this policy and also forfeit the premiums I have paid if they find the discrepancy?
If an insurer finds that the insured has made any incorrect statement, then the policy contract gets cancelled
I have inadvertently filled a few wrong details in the life insurance proposal form, which I now realise after a year. Will the insurer cancel this policy and also forfeit the premiums I have paid if they find the discrepancy?
Devangshu Ganguly, Kolkata
If an insurer finds that the insured has made any incorrect statement, or did not disclose any material information in the proposal form, or the personal statement, then the policy contract gets cancelled at the option of the insurers. Under such circumstances, the insurer has the option to cease all benefits under the policy. Even the premiums paid under the policy can be forfeited. However, in order to protect the interest of the policyholders and the claimants, Section 45 of the Insurance Act, 1938, refers that the insurers cannot exercise this option two years after the commencement of the policy, unless the incorrect statement is in respect of a material fact and has been made deliberately with the intent to defraud.