On 11-4-2016 Avtar Singh the grandson of the Life Assured had lodged a complaint against SBI Life Insurance Co. for payment of repudiated death claim for ₹ 9,99,000. The complainant had stated in his complaint that his g

"Proposal is the basis of insurance": The Insurance policy is a legal contract between the Insurer and the Policyholder. As is required for any contract there is a proposal and an acceptance. The application document that is used for making the proposal is commonly known as the 'Proposal Form'. All the facts stated in the Proposal form becomes binding on both the parties and failure to appreciate its contents can lead to adverse consequences in the event of claim settlement. The Proposal form has been defined under IRDA (Protection of Policyholders' Interests) Regulations, 2002 as "it means a form to be filled in by the proposer for insurance for furnishing all material information required by the insurer in respect of a risk, in order to enable the insurer to decide whether to accept or decline, to undertake the risk, and in the event of acceptance of the risk, to determine the rates, terms and conditions of a cover to be granted. Explanation: "Material" for the purpose of these regulations shall mean and include all important, essential and relevant information in the context of underwriting the risk to be covered by the insurer." While the IRDAI had defined the Proposal form, the design and content was left open to the discretion of the Insurance company. The Proposal form carries detailed instructions not only for the Proposer and the Proposed Life Insured but also to the Intermediary who solicits the policy and assists in filling up the form. It also requires the Proposer and the Proposed Insured to declare the correctness and authenticity of the information provided in the form. In addition, the Intermediary is required to certify that he has explained the features of the policy, including terms and conditions, premium requirements, exclusions and applicable charges to the Proposer. It is pertinent to mention here that the Proposal form gains utmost importance in any insurance contract, as the insurance company offers a cover on the basis of information provided in the Proposal form. The Proposal form, the Insurer seeks to elicit all material information of the Proposer and the Proposed Insured, which includes name, age, address, education, income and employment details of the Proposer, medical history of the Proposed Insured and his family members, income details, any existing life insurance cover on the Proposer as well as Proposed Insured. The Information sought in the Proposal form is important for an insurance company to assess the risk that can be underwritten and also to comply with other regulatory requirements such as the 'Know Your Customer' norms. Justification of Repudiation: When the insurance company has issued the policy based on the proposal and PAN-card as proof, the repudiation is not justified. It is because, it was observed that the company had admitted the age on the basis of PAN card at the time of proposal where the date of birth was mentioned as 02.05.1956. The Pan card is a standard age proof which was duly admitted and accepted by the insurer at the time of proposal which cannot be nullified by ration card, which is substandard age proof. On the other hand voter card is considered a nonstandard age proof and this cannot be over ride standard age proof only for the purpose of repudiating the claim unless the insurer proves that the Pan card is fake. The insurer admitted that they were not questioning the authenticity of the Pan card, hence denial of claim on this ground is not valid and justified. In view of these facts, the insurance company is to be directed to pay death claim of full sum assured ₹ 9,99,000/- and accrued bonus up to the date of death.