EFFECT OF THE EXPRESSION “ AGE ADMITTED”
We know that an insurance is a contract between insured and the insurance company. It is a contract based on utmost good faith, it means that a customer or prospects while submitting proposal with insurance company for applying an insurance coverage has to declare all material facts, that are going to affect decision of insurance company. There are various material factors for an insured to be declared such as , his age, health, circumstances , medical history, family medical conditions and even his financial conditions and the risk he wants to cover under insurance policy, etc. An insurance company will decide whether to accept risk or not or the amount of premium to be charged or the terms and conditions of insurance coverage on the basis of facts declared by the customer or prospects.
Age is one of the most important facts to be declared by the customer at the time of onboarding, because the rate of premium, the risk attached to his age, his medical conditions etc., will be determined on the age.
It is incumbent upon the assured/insured to give proof of his age during this life time, and if he dose so, the company writes across the policy the words “ AGE ADMITTED”.
The age has been admitted by the insurance company in writing after being satisfied with the proof furnished by the assured , not only would the person claiming under the policy be relieved from the necessity of providing the age in an action brought on the policy, but the company would also be precluded from producing, as of right , vide evidence to disapprove the age admitted. If however the court is satisfied that the admission has been obtained by fraud , or that there is another good and sufficient cause , it will be in its discretion under proviso to Section 58 of the Evidence Act to require the fact to be proved , otherwise than by such admission.
But if assured gives warranty as to correctness his age, and there is a breach of a warranty , the burden of proof is upon the company to prove the breach of warranty. Even if the warranty as to age is absolute , and not merely as to the belief of the assured , as to his age the onus will on the company as in the case of any other breach of warranty to the health ,habit ,etc. of the assured.
Please Note that : generally there is a condition in the prospectus that the duty of providing the correctness of age is cast on the assured. If such a prospectuses is incorporated in the issued Insurance Policy , the effect of such incorporation is to put onus on the assured or his representatives to prove age of the assured.
Oriental Government Security Life Assurance Company Vs. Narasimha Chari,(1901) 2 Mad 183;
Brief Facts: A Policy of insurance was filled in by person for sum of money payable at his death , and in the proposal form he stated age to be 58 next birthday, and declared that the particulars given by therein were correct. A personal statement was also signed by him which, inter alia contained a declaration as follows ;
“ I solemnly declare that according to the best of my knowledge and belief I am now in good health and that my age does not exceed 58 years and hat I have fully and faithfully answered all such questions as has been put to me in the proposal form and by the medical referees relative to my habits etc., without concealment and reservations.”
This declaration was the basis of contract between him and the company and he further agreed that in case any untrue averment , in the proposal form, or in the personal declaration etc., the assurance shall be void, and all the money paid there under shall be forfeited.
A policy was issued embodying such terms and conditions and provided that in case of any untrue statement or allegation or in case of misrepresentation or concealment , the policy should be void. In an action for claim, the company contended that the policy has been obtained by fraudulent misrepresentation as to age, means and circumstances of the assured. The age was shown to be three or four years greater than the actual one.
JUSTICE BHASHYAM AIYYANGER said that:
“ If the warranty was only as to the belief of the assured as to his age ,the onus will no doubt , be on the company to prove a breach of warranty by establishing that the assured could not have believed that his age did not exceed 58 years, and even if the warranty be an absolute one, the onus will probably be on the company as in other cases of breach of warranty as to the assured’s habits, health, medical attendance etc., to disapprove the correctness of the age as given by the assured.”
DECISION: it was held that the defendants( Company) were not liable under the policy and the plaintiff was not entitled under section 65 of the Contract Act to refund of premium paid on the policy during the life time of the assured.
Please Note That : when the money under the policy becomes payable , the company is in the position of a debtor and the assignee or legal representative or nominee is a creditor. The company does hold the money upon any trust. An insurance company is in the position of an ordinary debtor and must be treated accordingly. It cannot be deemed to be a trustee of the policy moneys even where the form of the policy is a charge upon the funds of the company without any direct promise to pay.
Oriental Government Security Life Assurance Company Vs. S.C. Chatterjee,(1899) 20 BOM 99; it was held by JUSTICE Faran that the effect of incorporating into policy the prospectus of the company is , I think to throw upon the assured , or his representatives , the onus of proving the correctness of age as warranted by the assured as containing a stipulation that the policy is issued subject to the assured proving the correctness of his age as early as he may find is convenient during his life time, or in default thereof his legal representatives proving the same on the settlement of his claim under the policy. If the assured subsequent to the issue of the policy produces before the company any proof of his age and the company being satisfied with the proof admits in the writing the correctness of he age, the legal representatives of the assured need not prove the same in an action upon the policy against the company.
CONCLUSION: it is advisable for insurance companies to take valid age proof of the customer at the time of onboarding. An insurance company one incorporate word “ AGE ADMITTED” in the insurance policy has not right to repudiate claim on the policy on the basis of age. In this case onus will be on the insurance company to prove that the age has been admitted due to fraud or misrepresentation of facts by the assured /insured.
DISCLAIMER the article produced here is only for information and knowledge of readers. The article has been prepared on the basis of available materials on different forums at the time of preparation. The views expressed here are personal views of the author and same should not be taken as professional advise. In case of necessity do consult with insurance advisors.