A, an employee of a government organization purchased a life insurance policy on 28-4-2011. It was a non-medical scheme policy as he was an employee of government organization and no medical examination was conducted. Th

The claim under the insurance policy was made by the legal heirs of the person assured after his death. As stated in the case the policy was taken by the person assured on 28.04.2011. Further the policy lapsed due to non-payment for the period from April, 2012 to October, 2012. The policy was revived by the assured on 03.01.2013 by paying the overdue premium. Unfortunately the person assured died on 13.01.2013 which was just 10 days after the revival of the policy. The insurance company carried out the investigation into the cause of death of the assured as per section 45 of the Insurance Act 1938. Section 45 of the Insurance Act 1938 states that Policy not to be called in question on ground of mis-statement after two years. No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement: was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false. or that it suppressed facts which it was material to disclose. Provided that nothing in section 45 of the Insurance Act, 1938 shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal. In the given case, the death of the life assured occurred less than 2 years of taking the policy and within 10 days of the revival of the policy. Due to this short period of taking up of the policy and death of the life assured there could be doubt about the intentions and doubts about the cause of death. Thus the investigation into the cause of death was carried out before processing of the claim under section 45 of the Insurance Act, 1938. This period of 2 years has now been amended to 3 years. Hence the Insurance Company has the legal right to call for and claim that there was suppression or non disclosure of material fact and leave the clause.