Clarity on Force majeure in life insurance contracts
Life insurance council constituted under section 64 C of Insurance act 1938, the face of the life insurance industry on 06- April- 2020 clarified that life insurance contracts would not be void due to Force majeure in case of COVID 19 death. In simple terms, family members of the policyholder can make a claim for insurance amounts, in case of the death of the policyholder.
This was done to clarify on rumors going in a market that insurance claims be denied on death claims arising out of COVID-19. All the companies have been advised to reach out to their customers in individuality to clear any such doubt arising in the mind of policyholders.
What is the force majeure?
Force majeure means superior force that would lead to unforeseeable circumstances that prevent someone from fulfilling a contract. It includes the act of God or natural disasters, warlike situations or pandemics, etc. This clause is widely used in the rent agreement. Enforcement of force majeure would render contract void and companies use this clause to get protection against liability in any unforeseen circumstances.
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