Life insurance companies will find it almost impossible to reject claims in future because of an amendment to Section 45 of the Insurance Act that allowed companies to call into question policies taken years ago. In the past, life insurers could avoid liability if they could prove that there was mis-statement or non-disclosure of material facts in the insured’s proposal form.
Insurance companies will however, settle only a single claim under the Prime Minister’s Jeevan Jyoti Bima Yojana (PMJJBY), which aims to cover all bank account holder for Rs.2 lakh, subject to an insurance premium of Rs.330. The Life Insurance Council – an association of Life insurers – is preparing a database of all those covered under the scheme in order to run a de-duplication process to weed out those who have bought more than one policy.
