Understanding the Impact of "Age Admitted" in Insurance Policies

Effect of the Expression “Age Admitted”

Insurance is fundamentally a contract between the insured and the insurance company, grounded in the principle of utmost good faith. This principle requires customers to disclose all material facts that influence the insurer's decision regarding coverage. Essential information includes the insured's age, health status, circumstances, medical history, family medical conditions, financial situations, and the specific risks to be covered.

Among these factors, age is pivotal. It directly impacts premium rates, associated risks, and the insurability of the individual. Therefore, it is essential for the insured to provide proof of age during their lifetime. When substantiated, the insurance company acknowledges this proof by inscribing “AGE ADMITTED” on the policy.

Once the age is admitted in writing by the insurance company after reviewing the provided evidence, the claimant is relieved of the burden of proving age during any legal actions involving the policy. Furthermore, the insurer is generally barred from disputing the admitted age unless compelling evidence of fraud or adequate cause is presented. Under Section 58 of the Evidence Act, courts may retain discretion to require such proof if the admission is found to be fraudulent.

In cases where the insured warrants the correctness of their age, any breach of this warranty places the burden of proof on the insurance company to demonstrate that the warranty has been violated. This holds true even if the age warranty is absolute and not based solely on the insured’s belief regarding their age.

Obligations Regarding Age Verification

Typically, insurance prospectuses stipulate that the responsibility for corroborating age rests with the insured. If this condition is included in the issued policy, it mandates that the insured or their representatives verify the correctness of the assured's age.

Case Study: Oriental Government Security Life Assurance Company vs. Narasimha Chari (1901) 2 Mad 183

• Facts: A policy was filled out by an individual stating an age of 58 years next birthday. He signed a personal statement assuming that he was in good health and that his age did not exceed 58 years. The declaration was foundational to the contract.
• Outcome: The insurance company argued that the policy was secured through fraudulent misrepresentation, citing the actual age as being greater than declared. Justice Bhashyam Aiyanger noted that the burden of proof remained with the insurer to disprove the assured’s age unless the warranty pertained merely to the insured’s belief.

Ultimately, the court concluded that the defendant company was not liable under the policy, and the claimant was not entitled to a refund of premiums under Section 65 of the Contract Act.

Company Responsibilities Regarding Policy Payments

When a claim under the policy is due, the insurance company assumes the role of a debtor, and the legal representative, nominee, or assignee becomes the creditor. The insurance company should not be regarded as a trustee of policy funds, even when the policy form suggests a charge over the company's assets.

Case Study: Oriental Government Security Life Assurance Company vs. S.C. Chatterjee (1899) 20 BOM 99

Justice Faran determined that including the prospectus in the policy shifts the responsibility to the insured to prove their age’s correctness. If solid proof is later presented, confirming age allows the legal representatives to forgo proving age in claims against the company.

Conclusion

It is crucial for insurance companies to require valid proof of age from customers at the time of onboarding. If the term “AGE ADMITTED” is included in the insurance policy, the insurer cannot deny a claim based on age alone. In such instances, the burden is on the insurance company to demonstrate that the age admission resulted from fraud or misrepresentation.