In Brief
A life insurance company repudiated a claim following the death of the insured spouse, arguing that the proposer had failed to disclose an earlier insurance policy obtained just two months before applying for the company's policy. The State and National Consumer Redressal Commissions had allowed the claim, reasoning that non-disclosure of a previous policy would not influence a prudent insurer's decision. The Supreme Court held that non-disclosure of pre-existing insurance policies, specifically requested in the proposal form, is material and justifies claim repudiation within two years of policy commencement. The information was sufficient to put the insurer to inquiry regarding the insured's human life value. The Court allowed the appeal, setting aside the consumer commissions' decisions, but permitted the insured to retain half the decretal amount already withdrawn.
The lawyer headnote and full judgment text are available to registered users.