Section 45 Insurance Act: The 3-Year Rule Explained

If a life insurance policy has been running for more than three years, the insurer cannot reject the claim by saying something was hidden or wrongly stated in the proposal form. Section 45 of the Insurance Act, 1938 closes that door and does not leave it ajar. After three years the statute says the policy cannot be called in question on any ground whatsoever. Read those last three words slowly, because they include fraud.

That is the whole answer. Everything below explains how the three years are counted, what the insurer is allowed to do before the clock runs out, and who has to prove what.

Scope of this page. This is the statute-and-burden reference for life insurance only. Section 45 sits in the part of the Insurance Act headed Special Provisions of Law and it speaks about a policy of life insurance. It does not govern health, motor or other general insurance policies, which run on a different and weaker rule explained further down. If your claim has already been repudiated and you want the complaint ladder rather than the law, start with our nominee guide to a rejected death claim and use this page for the legal argument you put in the letter.

The right hand column is deliberately monotonous. That is the point of the section.

Section 45 was replaced in full by the Insurance Laws (Amendment) Act, 2015, and the new section took effect from 26 December 2014. Sub-section (1) reads:

No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy, i.e., from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later.

Two drafting choices in that sentence do all the work.

The first is on any ground whatsoever. To see why that phrase was chosen, look at what it replaced. The pre-2015 Section 45 used a two-year period, and then said the policy could not be called in question

unless the insurer shows that such statement was on a 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.

That old escape route had no end date. Show fraud, and the insurer could reopen a policy of any age. The 2015 replacement deleted it. Parliament moved the fraud power into a separate sub-section (2) and expressly confined it to at any time within three years. Fraud is therefore not an exception to the three-year bar. It is a power that expires along with the bar.

A warning about older judgments. Searching for Section 45 will throw up decisions that talk about a two-year period, including the Supreme Court judgment in Reliance Life Insurance Co. Ltd. versus Rekhaben Nareshbhai Rathod, decided on 24 April 2019, which is where the wording quoted above is reproduced. That case applied the pre-2015 text because the policy before the Court was an old one, and the judgment does not deal with the three-year rule at all. Before you rely on any ruling, check which version of the section it was applying.

The second drafting choice is whichever is later. The clock does not simply start when you bought the policy.

Section 45 gives four dates and tells you to pick the latest one. Count three years from that.

The revival date is where families get hurt, and almost no explainer says so plainly. If a policy started in 2015, lapsed in 2022 and was revived in 2024, the three years run from the 2024 revival, not from 2015. A nine-year-old policy can therefore still be inside the contestable window. If the policy in your case was revived, read our guide on reviving a lapsed life insurance policy and find the exact revival date before you argue anything.

The same applies to a rider. The date of the rider is one of the four trigger dates the section lists, so adding a rider can push the three-year clock forward. If a rider was added recently on an otherwise old policy, read the repudiation letter closely to see what the insurer is actually treating as contestable, the base policy or only the rider benefit.

Being inside the window does not mean the insurer wins. Sub-sections (2), (3) and (4) load a real burden onto the company.

If the insurer alleges a mere misstatement, not fraud. Under sub-section (4), the insurer must show that a fact material to the expectancy of the life of the insured was incorrectly stated or suppressed. The Explanation to that sub-section then narrows it sharply. A misstatement or suppression is not material unless it has a direct bearing on the risk undertaken, and the onus is on the insurer to show that had it known the fact, no life insurance policy would have been issued at all. So the test is not whether the answer was wrong. The test is whether a correct answer would have stopped the policy being written. An undisclosed knee injury that had nothing to do with the cause of death rarely clears that bar.

If the insurer alleges fraud. Sub-section (2) defines fraud narrowly. It requires an act by the insured or the agent with intent to deceive the insurer or to induce it to issue the policy: suggesting as a fact something untrue that the insured does not believe to be true, actively concealing a fact the insured knows, any other act fitted to deceive, or something the law specially declares to be fraudulent. Explanation II adds that mere silence about facts likely to affect the assessment of risk is not fraud unless the circumstances imposed a duty to speak.

The defences the statute hands the family. Sub-section (3) says that despite the fraud power, the insurer shall not repudiate on the ground of fraud if it can be proved that the misstatement or suppression was true to the best of the knowledge and belief of the insured, or that there was no deliberate intention to suppress, or that the fact was already within the knowledge of the insurer.

Now the hard part, stated honestly because you will meet it. The proviso to sub-section (3) says that in a case of fraud, where the policyholder is not alive, the onus of disproving lies upon the beneficiaries. Inside three years, a nominee facing a fraud allegation is the one who has to disprove it. That single line is why the three-year bar matters so much. Once the clock runs out, the fraud argument disappears and the nominee never has to fight it.

The agent is the insurer's man. The Explanation at the end of sub-section (3) states that a person who solicits and negotiates a contract of insurance shall be deemed, for the purpose of the formation of the contract, to be the agent of the insurer. If the agent filled the proposal form and answered the health questions without asking your relative, that conduct is attributed to the insurance company, not to the family. Say so in writing, and ask for the original proposal form so the handwriting can be seen.

Premiums come back within 90 days. The second proviso to sub-section (4) says that where a policy is repudiated on the ground of misstatement or suppression of a material fact, and not on the ground of fraud, the premiums collected on the policy until the date of repudiation must be paid to the insured, or to the legal representatives, nominees or assignees, within ninety days of the repudiation. Insurers often stay quiet about this. If a rejection letter cites non-disclosure but does not allege fraud, the refund is due and you should demand it in the same letter that disputes the rejection.

There is also a procedural rule you can use immediately. Both sub-section (2) and sub-section (4) carry a proviso requiring the insurer to communicate in writing, to the insured or to the legal representatives, nominees or assignees, the grounds and the materials on which the decision is based. A one-line rejection saying non-disclosure of material facts does not satisfy that. Ask for the materials.

Sub-section (5) is the single carve-out, and it is much smaller than insurers suggest. It says nothing in Section 45 prevents the insurer from calling for proof of age at any time if it is entitled to do so, and that a policy is not deemed to be called in question merely because its terms are adjusted on later proof that the age of the life insured was wrongly stated.

Read that carefully. It permits an adjustment of terms, typically the sum assured or the premium, to match the correct age. It does not permit repudiation of the claim. An insurer that discovers a wrong date of birth on a fifteen-year-old policy may recalculate what the premiums should have bought. It may not refuse to pay.

A great deal of confusion comes from mixing up two different rules, and it is worth separating them because this site covers both.

The health rule keeps a fraud exception alive after the moratorium. The life rule does not. When a blog tells you that a life policy can still be attacked for fraud after three years, it has almost certainly borrowed the health moratorium wording. Check the source it cites.

Section 45 also survived the latest overhaul. The consolidated Insurance Act published as on 15 April 2026 shows only one amendment footnote against Section 45, the 2015 substitution. The Sabka Bima Sabki Raksha amendments that took effect on 5 February 2026 rewrote many neighbouring provisions but left Section 45 untouched.

1. Fix the trigger date first. Get the policy schedule, any revival receipt and any rider endorsement. Write down the latest of the four dates. Compare it with the date of death. This one calculation decides whether you are arguing law or arguing facts.
2. Demand the written grounds and the materials. Quote the proviso to sub-section (4) and ask for the proposal form, the medical reports and the investigation report the insurer relied on. Send it to the grievance redressal officer of the insurer and keep the acknowledgement.
3. If you are past three years, argue only that. Do not get drawn into whether a disease was disclosed. Say the policy completed three years from the latest trigger date, that sub-section (1) bars the policy being called in question on any ground whatsoever, and that the repudiation is therefore without jurisdiction.
4. If you are inside three years, attack materiality. Put the onus back on the insurer under the Explanation to sub-section (4): it must show that it would not have issued the policy at all. Add the premium refund demand if fraud has not been alleged.
5. Escalate to the regulator. If the insurer does not resolve it in 15 days, take it to IRDAI. Our walkthrough on filing an insurance complaint with IRDAI covers the Bima Bharosa route and what to attach.
6. Then the Insurance Ombudsman. This is free and the award binds the insurer. See the Ombudsman process for a rejected life insurance claim.
7. Consumer commission if needed. Repudiation of a valid claim is a deficiency in service. Our guide on how to file in consumer court in India sets out the forum and the fee.
8. Sort out who receives the money. A nominee is not always the final owner of the proceeds. Read nominee versus legal heir in life insurance before the money is disbursed.

For drafting the written demands, and for using the Right to Information Act against a public sector insurer such as LIC to obtain the underwriting file, The RTI Playbook has the letter formats and the escalation sequence.

No. This is the most misreported part of Section 45. The fraud power lives in sub-section (2), and that sub-section says a policy may be called in question on the ground of fraud at any time within three years. Sub-section (1) then bars any challenge whatsoever after three years. The pre-2015 version of Section 45 did contain an unlimited fraud exception, and a lot of writing online still repeats it. The section as substituted in 2015 does not.

No. Section 45 speaks of a policy of life insurance. Health cover runs on the IRDAI moratorium instead, which is 60 months of continuous coverage, after which no health policy and no health claim is contestable on any ground of non-disclosure or misrepresentation, except for established fraud. So the fraud exception survives in health and does not survive in life. Do not mix the two.

From the date of revival, because Section 45 tells you to take whichever of the four trigger dates is later. A policy first issued in 2015 but revived in 2024 becomes contestable again from the 2024 date, and stays contestable until 2027. This is the most common reason a family thinks it is protected when it is not. Find the revival receipt before you write to the insurer.

No. Both sub-section (2) and sub-section (4) require the insurer to communicate in writing the grounds and the materials on which the decision is based, to the insured or to the legal representatives, nominees or assignees. A bare conclusion is not compliance. Write back asking for the proposal form, the underwriting notes, the medical records and the investigation report, and record the failure to supply them in your Ombudsman complaint.

Yes, if the insurer repudiated for misstatement or suppression and did not allege fraud. The second proviso to sub-section (4) requires all premiums collected on the policy up to the date of repudiation to be paid to the insured or the legal representatives, nominees or assignees within ninety days of the repudiation. Claim it in writing and cite the ninety-day limit.

Not necessarily. The Explanation to sub-section (3) deems a person who solicits and negotiates a contract of insurance to be the agent of the insurer for the purpose of forming the contract. If the agent completed the proposal without putting the questions to the proposer, that is the company's own agent's conduct. Ask for a copy of the original proposal form so the handwriting and signature can be compared, and say plainly in your complaint that the proposer did not fill it.

Thirty days. The IRDAI Master Circular on Life Insurance Products dated 12 June 2024 gives a policyholder 30 days from the date of receipt of the policy document to review the terms and cancel if not satisfied, in line with the IRDAI Protection of Policyholders Interests, Operations and Allied Matters of Insurers Regulations, 2024. The older split of 15 days for physical policies and 30 days for electronic ones no longer applies. Free look is separate from Section 45 and does not affect the three-year clock.

It can ask for proof of age at any time, and if the age was wrongly stated it can adjust the terms of the policy to match the correct age. Sub-section (5) says such an adjustment is not treated as calling the policy in question. But that is an adjustment of the sum assured or premium, not a licence to repudiate the claim. If an insurer refuses payment outright on an age discrepancy after three years, it has gone beyond what sub-section (5) permits.

• Insurance Act, 1938, Section 45, in the consolidated text published as on 15 April 2026 by India Code, Legislative Department, Ministry of Law and Justice. Section 45 was substituted by the Insurance Laws (Amendment) Act, 2015, section 55, with effect from 26 December 2014.
• IRDAI Master Circular on Life Insurance Products, reference IRDAI/ACTL/MSTCIR/MISC/89/6/2024, dated 12 June 2024, paragraph 5 on the free look period.
• IRDAI Master Circular on Health Insurance Business, reference IRDAI/HLT/CIR/PRO/84/5/2024, dated 29 May 2024, clause 13 on the 60-month moratorium.
• Reliance Life Insurance Co. Ltd. versus Rekhaben Nareshbhai Rathod, Supreme Court of India, judgment dated 24 April 2019, cited here only for its reproduction of the pre-2015 text of Section 45.

This page explains the law. It is not a substitute for advice on your own policy. Check the four trigger dates on your own documents before relying on the three-year bar.