The Government of India intends to bring in a comprehensive legislation relating to insurance matters. There is an upbeat mood among all the insurance companies over the growth in their premium income through life insurance policies. The article intends to codify the possible extent the laws, rules and regulations available in our country can provide a safety net for funds invested by the policyholders in a life insurance policy.

The first and foremost the life assured under a life insurance policy has to ensure that he adheres to and complies with all the basic requirements on his part for the formation of life insurance contract, which is an uberrima fide (utmost good faith) contract, between him and the insurer. This is all the more necessary so that at a later date the insurance contract cannot be treated as void or voidable on the ground of misstatement or misrepresentation. Thus, the insured performs his duty of disclosure of all facts in the proposal necessary for the insurer to evaluate the risk correctly. Similarly, the insurer explains the terms and conditions of the proposed life insurance contract to the proposer without any ambiguity. This would make the insurer and the insured to have the consensus in concluding the contract. Thus, a legally sound step is made first by the insured in protecting his money (premium paid). The knowledge about relevant laws viz Indian Contract Act, Transfer of Property Act, Insurance Act 1938, etc. may be helpful in this regard. By this, the legal impediments if any are avoided in safeguarding one's investment in life insurance.

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