If you are purchasing a life insurance policy without disclosing your actual health conditions/ medical history/ habits like drinking or smoking, there is a possibility of rejection of claim in future. The Concept of Life Insurance is based on ‘Utmost Good Faith’ and you are supposed to disclose all material facts which you are aware of at the time of purchasing the policy.

For example, if you are a diabetic, you should disclose it to the insurance company at the time of purchasing the policy. But, you need not undergo a medical check up on your own to test whether you have diabetes and disclose it. The insurance company may charge an extra premium for you (loading in premium) in such cases or reject your proposal depending on your health condition.

The Insurance Company may conduct pre issuance medical checkup depending on your age and policy value as per the company guidelines. Based on the details given in the proposal form & based on the results of the medical checkup (if any), the insurance company will decide on your proposal for insurance. It can accept the proposal at normal rates or issue the policy with loaded premium or in extreme cases reject the proposal.

It is in your interest to disclose all facts and pay extra premium if any to avoid confusion later. This is extremely important while purchasing an insurance policy.

Suppose you are a diabetic and you are purchasing a policy without disclosing it. You may be able to purchase a policy like that if there is no medical checkup by the insurance company as per their terms and conditions. Unfortunately you are admitted in a hospital within few months with chest pain. While getting treated for chest pain, you will be disclosing all your health condition to the cardiologist. At that time, saving life is important! The doctor will record all previous health issues including diabetes. These details will be reflected in the discharge summary. The discharge summary will look like this.

Male aged 40 years was admitted in the hospital with complaint of chest pain. He is a known case of diabetic for the last 10 years and was on insulin for the last 5 years.

Such a discharge summary is enough for the insurance company to reject a death claim in future due to suppression of material facts. In this case, you are aware that you are a diabetic, but you have not informed this to the insurance company at the time of purchasing the policy.

Section45 of the Insurance Act

As per Section 45 of the Insurance Act, no life insurance policy can be called in question for any reason whatsoever after a period of 3 years from the date of commencement of risk or reinstatement or addition of rider.

Therefore, a strict interpretation of the section would mean that even if there was a willful non-disclosure, the right of denial of death claim is not available for the insurance company after 3 years.
But it is in your own interest to disclose all details and purchase the policy. After all, you are purchasing the policy to protect your family in case of your untimely death anytime. It can be even within 3 years!