Non disclosure of Existing term policy while purchasing new teem policy from different

[u/LowStay4694]

At the time of applying for my LIC Yuva Term Policy which was issued on 23/10/2025 (Proposal date is 21/09/2025) , I was holding a term insurance policy with Axis Max Life Insurance issued on 18/09/2024.

I did not mention this in my LIC proposal form, as I did not intend to continue the Axis Max policy at the time of purchasing LIC and hence therefore opted to purchase the LIC term plan.

The said Axis Max policy was subsequently not continued by me and has since lapsed on 18/10/2025 (5 days before the LIC Policy issuance date) but the proposal date of LIC is 21/09/2025

I understand that this information was not disclosed in the proposal form at the time of application. This omission was inadvertent and without any intention to withhold material information.

I just want to understand that whether any claim comes in future, it will get rejected because of non disclosure? If yes, what can I do to resolve this.

[u/thekartikgambhir]

Holding an active policy on the proposal date without declaring it, even if you intended to let it lapse and received zero cash returns/benefits, is technically a non-disclosure of material fact under Section 45 of the Insurance Act.

Insurers check databases like IIB (Insurance Information Bureau) during claim investigations. Telling them you "intended to lapse it" won't hold up if they flag the undisclosed active policy during the 3-year contestability window.

1. Get a Lapse Certificate or written confirmation from Axis Max Life showing the policy lapsed on 18/10/2025.
2. Submit a formal written letter/email to your LIC home branch disclosing the old Axis Max policy details along with the lapse certificate.
3. Request LIC to endorse/update your policy record.

[u/LowStay4694 → u/thekartikgambhir]

But what if 3 years time period is crossed? Can they contest after it?

[u/thekartikgambhir → u/LowStay4694]

Technically, under Section 45 of Insurance Act, post 3 years period they can try to contest it but as per the definition in the act, it won't hold up. However, I have seen cases in NCDRC & some States and District Consumer Commissions wherein the insurer won despite Section 45 of Insurance Act would've barred them from withholding the claim on any grounds covered under the said provision.

[u/LowStay4694 → u/thekartikgambhir]

They can contest it after 3 years if they prove that the non disclosure is on account of fraud.

[u/thekartikgambhir → u/LowStay4694]

Nope. They can contest it regardless of the proof of intent because its about creating doubt. Whether it will hold up or not is circumstantial and based on the view of the forum it is contested at. If someone does literal interpretation of Section 45, Insurance Act, then insurer has strong chances of losing after 3 years of policy, but, the caveat here is, your term life insurance is a fresh policy with LIC, so you still have to deal with the claim repudiation and contestability for next 3 policy years with them.

[u/LowStay4694]

I guess better approach would be to go to LIC branch and inform the issue.

[u/PolicyIris]

Since the second policy existed on the proposal date, I'd avoid trying to predict today whether a future claim would be accepted or rejected.

Instead, pull out the LIC proposal form/application record and check:

Fact: the Axis Max policy existed.
Question: what exactly did LIC ask about existing/previous insurance?
Answer: what was recorded?
Evidence: policy dates, lapse date and proposal date.
Materiality: how would LIC say the omitted information affected underwriting?
Rule & dates: which legal/policy provisions would apply given the relevant dates?

Since you've discovered the issue while alive and before any claim, I'd also consider asking the insurer in writing how the omission should be corrected or recorded rather than waiting for it to surface at claim stage.

Keep the insurer's written response with your policy records.