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Beshak Insurance dictionary

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Section 45
Term Life Insurance

An Insurance company assesses the quality of life assured based on many declarations made by the proposer or life assured before the policy is issued. The quality of life helps the insurer make decisions with regards to issuing the policy, charging a certain premium, or declining the proposal.

In case the declarations made to the insurance company are incorrect or misleading, the insurer usually has a right to investigate, and cancel the policy or decline the claim, based on documentary evidence that proves the misrepresentation.

First three years: Insurers have a fixed time period of three years to investigate and cancel policies/decline claims. If a claim arises during this time period, then.

  1. Insurers can call an insurance policy for a question during this period for fraud
  2. This investigation has to be in writing explaining in detail the grounds for investigation.
  3. The cancellation of the policy has to be communicated by the insurer in writing.

From the fourth year: Insurance laws do not allow insurers to question the proposal form or decline the payment of claims on any ground after the completion of three years from the date of commencement of the policy or revival of the policy.

What is fraud?

  1. Any act committed by the person covered, proposer or the agent to deceive an insurer to issue the policy
  2. Untrue / False declaration
  3. The active concealment of a fact
  4. Any other act of deceit
  5. Any act or omission that is considered fraudulent under law.

What is not fraud?

Mere silence to facts cannot be considered fraudulent unless proven it was deliberate.
If the person covered, the proposer can prove that the misstatement was to the best of his/her knowledge, and there was no deliberate intention. The onus lies with the person covered, proposer, or nominee.


  1. If the policy is canceled based on fraud, no premiums are refundable
  2. If there is no fraud proven, but the policy is canceled, the premiums will be refundable