POSTED BY June 23, 2013 6:22 pm COMMENTS (2)ON
I have a term insurance purhcased 5 years ago from LIC for 25 lacs. Just few days ago I opted for another term insurance from private insurer for 1 crore sum assured. Now, I want to take another term plan for Rs .1 crore more. Seeing the cost of total term plan annually, I am contemplating to stop insurance cover from LIC. Would it be wise decision ?
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2 replies on this article “Exit term plan from LIC”
Dear Subhas, why did you not purchase a single cover of 2 Cr or 1.5Cr?
Do not, repeat do not exit the LIC term unless and until your new term polices are at least 3 years old.
Why? read this carefully:
Section 45 of Insurance Act 1938 – Indisputability Clause
No policy of Life Insurance shall, after the expiry of two years from the date on which it was effected, be called in question by an Insurer on the ground that a statement made in the proposal for insurance or any report of a medical officer or referee or friend of the Insured or in any other document leading to the issue of the Policy, was inaccurate or false, unless the insurer shows such statement was on material* matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder and that the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose.
Most policies which are are delayed are rejected are less than two years old.
Many policy claims have rejected on flimsy grounds for sum assured as small as 5 lakhs!