Pure Term Insurance lumpsum plan query

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harshbly asked 7 years ago

Hi Sreekanth, Your articles and methods of explaining instruments is very easy , interactive and easy to apply. I enjoyed reading your articles. Have a small query regarding Term Plan. Non Alcoholic and Non Smoker /Policy Term : 41 yrs / Policy Premium Paying Term : 10 yrs / SI = 50L / Premium = xyz / Current age : 34 yrs / No Riders Case 1 : Suppose somebody started drinking after 40 (regular / occasionally ) and he passed away (medical reason : alcohol) . Will his/her policy we Null and void or Nominee will get the SI ? Case 2 : Suppose somebody started drinking (regular / occasionally ) at age of 50 and he passed away.Will his/her policy we Null and void or Nominee will get the SI ? (As he has already paid all the premiums and covered till 75yrs of age) In Nutshell , Person is not drinking & smoking today. But he may consume over period of time then how Policy Issuer decide he will pay SI or NOT Reason for asking these is , No body was giving the satisfactory answer and Nor its documented anywhere in T&C Regards Harsh Bansal harshbly**@gmail.com

1 Answers

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Sreekanth Staff answered 7 years ago

Dear Harsh, Thank you for following my blog posts! Case 1 & 2 - Yes, your nominee will receive the sum assured, as on the date of signing the contract, the policyholder is a non-smoker/teetotaler In my opinion, that you start smoking or drinking after purchase of policy should not be a ground for revocation of life cover or rejection of claim. The policy was underwritten based on your health condition and disclosures at the time of policy purchase. If the policyholder has developed any habit, like drinking or smoking, after buying the policy, he generally does not have to disclose this fact to the company at all, unless it’s clearly mentioned in the policy document Also, note that - As per the recent amendment to Section 45 of the Insurance Act, If your policy is 3 years old, no matter what happens, the life insurance company will not be able to deny the claims. So, your life insurance company has only 3 years in hand to reject the policy based on any mis-representation or mis-statement. Once 3 policy years are completed then the life insurance company has to settle the claims and can not reject them.

harshbly replied 7 years ago

Thanks Sreekanth ,
But non of the policy documents talks about it.
My delima still remains 🙁

Sreekanth Staff replied 7 years ago

Hi,
If it is not explicitly been mentioned in the policy wordings then kindly do not worry!