I have an elementary question regarding ‘Life Insurance” for my knowledge & keeping my insurance benefits intact throughout its tenure/ validity.
Is life insurance a renewable contract i.e?
• Once a policy has been issued,
• It remains enforceable throughout its validity?
Can an insurer:
1. Cancel the policy,
2. Charge a higher premium thereafter,
3. Modify the terms & conditions,
4. Restrict or reduce the benefits subsequent to the issue of the policy.
The policy may have been issued with or without medical, based upon the proposal form or other underwriting considerations.
The question had assumed importance because of the fact that one of the executive of an insurance co. had advised that claim would be repudiated (policy has already been issued) even if the proposer was a non smoker at the time of ‘Term Insurance’ (the medical has also been carried out because the sum insured was Rs. 1 cr.) & subsequently it is found out that the proposer becomes a smoker. How they would find out? May be the cause of death was smoke induced conditions/ post mortem report etc.
Is he right & if he is, than is the proposer under obligation to disclose all material facts effecting the mortality, subsequent to the issue of the policy, like diabetes, hyper tension, change in the physical conditions which are resulting from advancement of age or accelerated due to an accident (amputation of leg or arm, deafness, loss of sight) etc.
There could be numerous other reasons which were not there at the time of insurance like smoking. Is the premium not taking care of all such adverse factors, which may be there or bound to be there?
If the insured is bound to disclose all these factors subsequent to the issue of the policy, the question assumes importance i.e.
“WHETHER THE LIFE INSURANCE IS A RENEWABLE CONTRACT”?