Can a Life Insurer Reject a Claim After 3 Years? Section 45 (2026)

Quick answer: Under Section 45 of the Insurance Act, 1938, a life insurance policy cannot be called in question on any ground once three years have passed — counted from the latest of its issue date, risk-commencement date, revival date or rider date. Within those three years an insurer can still repudiate a claim, but only for fraud or for a misstatement that materially affected the risk, and it must give the family its grounds and evidence in writing. The detail most households miss: reviving a lapsed policy restarts the three-year clock from scratch.

What Section 45 actually says

Section 45 is the strongest consumer protection in Indian life insurance law, and it is barely four paragraphs long. Sub-section (1) carries the headline: no life insurance policy shall be called in question on any ground whatsoever after the expiry of three years. Sub-sections (2) and (4) set out what an insurer may do inside that window, and sub-section (3) limits even that. The effect is a contestability period — three years in which the insurer can go back and test what you wrote on the proposal form, after which the door closes.

When the three-year clock actually starts

This is where families get caught out. The statute does not simply say "from the date you bought it". It counts three years from whichever of these four dates is latest:

• the date the policy was issued;
• the date risk commenced;
• the date the policy was revived;
• the date a rider was issued.

So a term plan bought in 2019 that lapsed in 2023 and was revived in 2025 is not a six-year-old policy for Section 45 purposes. The revival resets the clock and the insurer regains the right to contest until 2028. A critical illness or accidental death rider added last year carries its own fresh window too. If you are reviving a lapsed policy, treat the revival declaration as seriously as the original proposal form — any health event from the lapsed years belongs on it.

Inside three years: fraud versus misstatement

The law treats these two grounds very differently, and the difference decides how much money the family receives.

• Fraud (sub-section 2). The insurer must show an act committed with intent to deceive — asserting something untrue, actively concealing a known fact, or any other act fitted to deceive. The insurer must communicate the grounds and materials in writing. If fraud is established, the policy goes and no premiums are returned.
• Misstatement or suppression, not amounting to fraud (sub-section 4). Here the insurer may still repudiate, must still put its grounds and materials in writing — but it has to pay back every premium collected on the policy up to the date of repudiation, and within 90 days of that repudiation.

That 90-day premium refund is a real entitlement, and it is routinely overlooked by families who assume a rejected claim means nothing comes back.

The tests the insurer has to clear

Section 45 does not let an insurer walk away over any inconsistency it finds in a medical record. Three limits sit on top:

• Materiality. The Explanation to sub-section (4) says a misstatement is not material unless it has a direct bearing on the risk the insurer undertook — and the onus is on the insurer to show that, had it known, it would not have issued the policy at all.
• Mere silence is not fraud. Explanation II to sub-section (2) says staying silent about facts that might affect the insurer's risk assessment is not fraud, unless there was a duty to speak or the silence itself amounted to speaking.
• Three statutory defences. Sub-section (3) bars repudiation on fraud grounds if it can be shown that the statement was true to the best of the insured's knowledge and belief, or that there was no deliberate intention to suppress, or that the insurer already knew the fact.

One caveat the family should know in advance: the proviso to sub-section (3) puts the onus of disproving fraud on the beneficiaries when the policyholder is no longer alive. Sub-section (3) is a genuine shield, but the nominee is the one who has to raise it.

After three years: what the protection does and does not do

Past the three-year mark, an insurer cannot reopen the proposal form. Undisclosed diabetes, an omitted smoking habit, an understated income — none of it can be used to set the policy aside.

Two things Section 45 does not do, and both matter:

• Age can still be checked. Sub-section (5) expressly preserves the insurer's right to call for proof of age at any time. If the age was wrong, the policy terms are adjusted accordingly, and the law says that adjustment is not the policy being "called in question".
• It does not rewrite what the policy covers. Section 45 stops an insurer from attacking the validity of the contract. It does not turn an uncovered event into a covered one, and it does not resurrect a policy that has lapsed for unpaid premium. A claim can still fail on ordinary policy terms — the first-year suicide clause, for instance, or a benefit that was never part of the plan. Where the boundary sits in a particular dispute has been litigated, so a repudiation that turns on this distinction is worth taking to a professional.

How this differs from the health insurance moratorium

People mix these up constantly. Section 45 is a life insurance provision in a statute. The health insurance equivalent is the moratorium, an IRDAI rule that bars non-disclosure-based rejection after 60 months of continuous cover, except for established fraud. Different law, different clock, different product — we cover the health side separately in our 60-month moratorium explainer and across the health insurance knowledge hub.

The timelines your insurer is held to

IRDAI's Master Circular on Protection of Policyholders' Interests, 2024 sets turnaround times for life claims:

• Death claim not warranting investigation — settle within 15 days of claim intimation.
• Death claim warranting investigation — settle within 45 days of intimation.
• Surrender or partial withdrawal — within 7 days of the request.

Miss those, and the claimant is entitled to interest at bank rate plus 2 percent from the date the intimation was received until payment. The circular requires insurers to pay that interest suo motu, without being asked.

Checklist: if a life claim is repudiated

• Get the written grounds. Sub-sections (2) and (4) both require the insurer to communicate the grounds and materials in writing. Ask for the underwriting file and the medical evidence relied on.
• Date the policy properly. Work out the latest of issue, risk-commencement, revival and rider dates. If three years have passed from that date, say so in writing.
• Check whether premiums are due back. Non-fraud repudiation carries the 90-day refund of all premiums collected.
• Escalate to the Grievance Redressal Officer at the insurer first. This step is a precondition for what comes next.
• Then the Insurance Ombudsman. A complaint lies if the insurer rejected your representation, or did not reply within one month, or the reply was unsatisfactory — and it must be filed within one year. The award ceiling was raised to Rs 50 lakh by the Insurance Ombudsman (Amendment) Rules, 2023. The award is binding on the insurer, which must comply within 30 days; failure attracts Rs 5,000 per day payable to the complainant. Our guide to GRO, Bima Bharosa and the Ombudsman walks through the filing route.
• Do not file in two places at once. The Ombudsman cannot hear a matter already pending before, or decided by, a court, consumer forum or arbitrator.

One note on what is in flux: the Ministry of Finance released draft Insurance Ombudsman (Amendment) Rules in late 2025 proposing an appellate layer above the Ombudsman. Those remain draft proposals, not law — check the Council for Insurance Ombudsmen site for the current position before relying on it.

What the claim numbers actually show

IRDAI's Annual Report for FY 2024-25 puts the industry's individual death claim settlement ratio at roughly 98 percent by number of claims, with repudiations under 2 percent. Settlement by amount runs about a percentage point lower, which is the more telling figure — larger claims attract more scrutiny. Outright rejection is uncommon, and honest disclosure at proposal stage is what keeps it that way. See our term life insurance section if you are still choosing a plan.

Frequently asked questions

Does the three-year clock start from the day I bought the policy?

Only if that is the latest of the four dates. The clock runs from whichever is later: issuance, commencement of risk, revival, or the date of a rider. Check your policy schedule rather than assuming.

My policy lapsed and I revived it. Am I still protected?

The revival resets the three-year contestability window from the revival date. The policy's original age does not carry over for this purpose, which is why the revival health declaration deserves the same care as the original proposal form.

Can an insurer reject a claim after three years if it discovers I hid an illness?

No. After three years the policy cannot be called in question on any ground whatsoever, and that includes non-disclosure and fraud. The insurer's right to verify age survives, and ordinary policy terms still apply.

If the claim is repudiated inside three years, do we get anything back?

If the repudiation is for misstatement or suppression and not for fraud, all premiums collected up to the date of repudiation must be paid to the nominee or legal representative within 90 days. If fraud is established, no refund is due.

Does Section 45 apply to health insurance?

No. Section 45 is specific to life insurance. Health policies are governed by the moratorium rule instead, which bars non-disclosure-based rejection after 60 months of continuous cover, fraud excepted.

Is the Ombudsman route free?

Yes, there is no fee to complain to the Insurance Ombudsman, and you can file yourself without a lawyer. You must have approached the insurer in writing first, and you must file within one year of its rejection or unsatisfactory reply.

Sources: Section 45 of the Insurance Act, 1938 (statutory text as reproduced on Indian Kanoon); IRDAI Master Circular on Protection of Policyholders' Interests, 2024 (claim settlement timelines and penal interest); Insurance Ombudsman Rules, 2017 as amended, published by the Council for Insurance Ombudsmen; Insurance Ombudsman (Amendment) Rules, 2023, G.S.R. 828(E), which raised the award ceiling to Rs 50 lakh; and the IRDAI Annual Report 2024-25 for claim settlement data. NewEdgePolicy is an independent insurance education publisher and does not sell policies. This is general information, not legal or financial advice — for a specific repudiation, consult a qualified professional.