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Do You Know the Three Year Clause in Life Insurance?

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Do you know a life insurance company cannot reject your claim for non-disclosure in the proposal form after three years? Yes, you read it right. As per Section 45 of The Insurance Laws (Amendment) Act 2015, no insurance company can reject the claim after three years* of the life insurance policy being in force or three years from the date of policy reinstatement.

Do You Know the Three Year Clause in Life Insurance?

Read the blog to know in detail.

What Section 45 of The Insurance Act Says?

Post Section 45 of The Insurance Laws (Amendment) Act 2015, insurance companies cannot question a life insurance policy after three years. The insurer has no right to reject a life insurance claim on the grounds of misrepresentation or suppression of material facts or even if the insured commits suicide after three years. A claim can be refused only if the life insured is involved in criminal activity or commits fraud while submitting claim documents.

Can an Insurer Repudiate a Life Insurance Policy Within 3 years?

An insurer can repudiate a life insurance policy within three years on the grounds of misrepresentation or suppression of material facts.

All the premiums collected until the date of the repudiation may be refunded to the life insurance policyholder or can be forfeited if proven that the insurance policy was taken for a fraudulent motive.

However, if the insurance company detects fraud within three years, then the claim can be rejected and the premium will be forfeited.

Also Read:  5 Reasons Why Health Insurance Claims get Rejected amid Covid-19

*Note: Three years shall be calculated from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later.

Insurance Samadhan

Impact of Section 45

Insurance companies have three years to investigate a life insurance policy. Once the period of three years lapses, no claim can be rejected on the grounds of misrepresentation of facts. This amendment should make insurers more alert and sell policies diligently.

The policyholders must ensure that they have revealed all material facts to the insurance company. They must carefully read all the terms and conditions before signing the proposal form. This will help the policyholders to prevent claim rejection.

If the insurance company rejects your genuine claim within 3 years or even after 3 years, then you can reapply. If you are unable to fight for your genuine claim and need help, then contact Insurance Samadhan.*

Insurance Samadhan has helped resolve 14,500+ complaints of policyholders. These complaints include insurance mis-selling, claim rejection, delay in claim settlement, etc.

Contact us to get samadhan for your insurance issues, we’ll be happy to help you.

*Insurance Samadhan is a private organisation and has no association with IRDA or any Government body.


Click on the below links to read some cases resolved by Insurance Samadhan:

Dengue Claim Rejection

Death Claim Rejection

Cashless claim rejection

Click here to register your complaint with Insurance Samadhan

You can also

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Call us on +91 9513631312

Also Read:  Maturity Benefit in Life Insurance

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Insurance Samadhan

Shailesh Kumar

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