SC: A proposer who seeks life insurance policy is duty bound to disclose all material facts

The Hon’ble Supreme Court, on 9th October 2020, in the matter of Branch Manager, Bajaj Allianz Life Insurance Company Ltd and Others v. Dalbir Kaur observed that a proposer who seeks to obtain a policy of life insurance is duty bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed.

The Hon’ble Supreme Court observed that:

A contract of insurance is one of utmost good faith. A proposer who seeks to obtain a policy of life insurance is duty bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed. (Para 9)

It is with this principle in view that the proposal form requires a specific disclosure of pre-existing ailments, so as to enable the insurer to arrive at a considered decision based on the actuarial risk. (Para 9)

Copy of judgment: Judgement_09-Oct-2020

-Adv. Tushar Kaushik

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