What are the Conditions Relating to Commencement of Risk (Insurance)?

Conditions Relating to Commencement of Risk

1. Commencement of Risk :

The letter of acceptance is not a cover note, it only intimates that the risk will commence when the first premium is offered to and accepted by the insurer. If premium was paid along with the proposal form, the date of letter of acceptance will be the date of commencement of risk.

After acceptance of risk, policy is issued. The policy contains terms and conditions of the insurance and is a document which can be used as a proof of insurance.

2. Proof of Age :

The proof of age must be produced at the time of proposal or immediately after the proposal because the rate of premium depends upon the age of the life assured. The insurer does not withhold the issue of the policy for want of proof of age, but does not admit any claim unless the age is proved to the satisfaction of the insurer.

However, if it is subsequently found that the age at entry was mentioned lower than the correct age, the assured sum is reduced to such amount as would have been purchased at the true age.

If the actual age comes out to be lower than the stated age, the difference is either refunded or adjusted towards future premium or policy amount. The proof of age is very essential at the time of proposal in the term policies.

Multi-purpose policy, children’s Differed Endowment Assurance, Immediate Annuity and deferred annuity, where the life assured has not completed 20 years or where the life to be assured has completed 50 years of age or the proposal is under the Salary Saving Scheme.