The recent Supreme court of India judgement is a landmark judgementwhich has accepted that incorrect info being provided in the proposal form can lead to policy being repudiated.
Even though this judgement pertains to a claim which was lodged on LIC and was repudiated-but the fact is that this will also be applicable for other proposals ,especially health insurance .Good % of persons who are submitting proposals,but have preexisting disease have a tendancy to hide the same on the assumption that insurance company can not come to know about this.Medical science has progressed to such an extent that it is very easy to find out that disease has been there for how many years,if not being accurate to years,months & days.
SC judges said" The purpose for taking a policy of insurance is not in our opinion,very material.It may serve the purpose of social security but then the same should not be obtained with a fraudulent act by the insured.Proposal can be repudiated if a fraudulent act is discovered the proposer must show that his intention was bonafide."
Thursday, November 22, 2007
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