Page 58 - IC23 life insurance application

The policies issued by LIC are free from all restrictions as to travel, residence and

occupation. This privilege is in strict contrast to pre-nationalisation days, when some

of the foreign companies were granting rebate for the period spent in Europe or

USA, which were assumed to have healthier climate.

As to occupation, it is worth noting that though insurer charges extra premium, if the

proposer is engaged in hazardous occupation and removes such extra premium, if

such occupation is given up, it does not charge any extra premium to such

policyholders who after having taken the insurance, takes up a hazardous job. In

fact, no policyholder is required to keep the insurer informed of the change in

occupation during the continuance of any insurance policy.

Suicide clause

This is an important restrictive clause. It precludes payment of claim, in case the

policyholder has committed suicide within a period of twelve months from the date of

taking the policy i.e. commencement of the risk. In USA this restrictive clause

extends to two years. This clause is intended to discourage persons from benefiting

from insurance by committing suicide immediately after insuring. Life is very precious

to oneself and such intention cannot last a period of one year.

However, if during this period of one year, somebody has acquired a beneficial

interest by payment of valuable consideration (and not by love and affection), then

such interest is protected provided LIC has received a notice therefore.

Death claim is payable during the period in which the policy is kept in force. Its

procedure has been explained in detail else where.

Copyright Dr Rakesh Agarwal Sashi Publications Private Limited

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