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Why Is Life Insurance Important?

Life insurance is not just a way to save money; it is a strong tool to secure the financial future of you and your family. However, when it comes to making a claim, many people wonder if the insurance company can refuse to pay the claim even after paying premiums consistently.

Why Are Claims Considered Safe After Three Years?

According to a significant amendment made in the insurance law in 2015, known as Section 45, if you have paid the premiums of your life insurance policy regularly for three years, then after this period, the insurance company cannot challenge the policy for any reason.

What Is the Contestability Period?

The first three years from the start of the policy is called the "Contestability Period." During this time, if the insurance company finds that important information was hidden or falsely given when taking the policy, it can investigate and reject the claim if necessary.

What Happens After Three Years?

Once the three years are completed, the insurance company cannot challenge your policy for any reason, even if information was incorrectly stated or hidden. Only in cases of proven deliberate fraud, which is very difficult, can the company reject the claim.

Rules for Claim Rejection Within the First Three Years

If the company suspects any mistake or hidden facts within the first three years, it can reject the claim. In cases of proven fraud, the company can even forfeit the premiums paid. Otherwise, if fraud is not found, the paid premiums may be refunded.

What Precautions Should You Take When Buying a Policy?

• Always provide accurate and complete information.

• Pay your premiums on time.

• Understand the terms and conditions of your policy clearly.

Conclusion

After paying premiums regularly for three years, your life insurance claim is legally protected. Life insurance is not just an investment but a safeguard for your family's financial future. By giving correct information and making timely payments, you can provide your family with financial security.

This blog clarifies that insurance companies cannot reject claims after three years unless fraud is proven. Therefore, honesty and transparency while taking the policy and during the first three years are essential. It is a strong shield for you and your family’s protection.

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Disclaimer: Bimacure is an independent legal consulting firm and is not associated with IRDAI or the Insurance Ombudsman in any manner.