An Insured applies for life insurance and states in the application that he has not visited a doctor during the last five years. However, six months earlier, he had surgery for lung cancer. He passed away three months af

Yes, the insurance company can deny the claim because the policy owner's statement is both false and material. In insurance, "utmost good faith" ( uberrimae fidei ) is a fundamental principle requiring both the insurer and the insured to act with the highest degree of honesty and transparency. This means disclosing all material facts and details relevant to the insurance contract. When a fact that affects the policy issuance decision is not disclosed in the proposal, it is termed as, 'non-disclosure'. Similarly, withholding information or providing incorrect information while answering questions in the proposal form is termed as, 'misstatement'. In this case, the insured made a false statement by claiming not to have visited a doctor in the last five years, despite having undergone surgery for lung cancer six months prior. This is a material misrepresentation as it directly impacts the assessment of risk by the insurer. Since the insured passed away only three months after policy issuance, it falls within the period where the insurer can investigate and repudiate the claim based on misrepresentation or non-disclosure of material facts, as per Section 45 of the Insurance Act, 1938 (often within the first three years). Therefore, the company has strong grounds to deny the claim due to the breach of the principle of utmost good faith and material misrepresentation.