Page 49 - IC23 life insurance application

and conditions decided by the insurer. The proposer further agrees to keep the

insurer informed of any changes in the position relating to his health or his

occupation between now and the issuance of the first premium receipt.

It is thus clear that after the insurer has issued the first premium receipt, the contract

is said to have concluded and thereafter the insurer has no right to change the terms

of the contract.

However, the insurer has a right to offer any term and condition before the final

acceptance of the insurance. For example, in case of a female proposer, the insurer

may not agree to accept the risk of the childbirth. In case of certain hazardous

occupation like commercial pilots, the insurer may like to exclude the risk to life due

to such occupation. In case of certain deformity, the risk of accident can be

excluded. These exclusions of risks are not normal terms of the policy contract and

therefore have to elicit consent of the proposer. In case of a substandard health, the

insurer may like to accept a reduced risk during the first one or two years of the

insurance. The consent of the insured is a must for such limitations to be imposed.

All such special conditions or riders are mentioned in the policy either by an

endorsement or attachment to the document. If the insurer has taken a Convertible

Whole Life Plan which is to be converted to an endowment plan after 5 years, the

necessary condition is endorsed on the policy.

The terms and conditions as mentioned in the policy along with such endorsements

as made on the back of the policy govern the insurance contract and are open to be

interpreted by a court. However it may be noted that agents confidential report and

the medical examination (confidential) report are not part of the contract for

insurance.

Copyright Dr Rakesh Agarwal Sashi Publications Private Limited

Sashi Publications Pvt Ltd Call 8443808873/ 8232083010