In Brief
A 30-lakh rupee housing loan included a life insurance policy covering the borrower's son. Premium of Rs. 78,150 was debited from the account with a good health declaration, and the insurance company received it. The son died of a heart attack over a year later. The insurer refused to pay, claiming the proposal was never accepted because the applicant never appeared for mandatory medical examination. The Supreme Court held that by accepting and retaining the premium without timely rejecting the proposal or calling for medical examination, the insurer waived the examination requirement and accepted the contract. The Court restored the State Commission's order directing the insurer to pay the outstanding loan amount."
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