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Do you have “Utmost Good Faith”?

Life insurance exists to protect a family’s financial future when the earning member is no longer alive. In return for premiums, the insurer agrees to pay a sum assured to the nominee upon the insured’s death, regardless of whether the...
February 12, 2026 Insurancepe 5 min read
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Life insurance exists to protect a family’s financial future when the earning member is no longer alive. In return for premiums, the insurer agrees to pay a sum assured to the nominee upon the insured’s death, regardless of whether the death occurs due to illness or natural causes (subject to policy conditions).

The NCDRC overturned the state ruling. It held that a life insurance contract is governed by utmost good faith and the proposer must disclose all material facts. The Commission concluded:


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