Return of Premium in Life Insurance

Ordinarily, the premium one paid cannot be refunded. However in the following cases the premiums paid are returnable.

1. For reason of Equity

Equity implies a condition that the insurer shall not receive the price of running a risk he runs.

Thus, there the contract does not come into effect or its it held to be void ab initio. For example, on account of misrepresentation or breach of warranty, the insured, in the absence of any express condition to the contrary, can claim the return of any premiums paid.

But if the policy runs for a time and becomes void later on, the insured is not entitled to the return of any part of the premium.

Where the insured is guilty of fraud in obtaining a policy, he will fail in his claim to the sum assured. He cannot also ask for a return of the premiums because he will have to allege his own fraud to succeed in his claim and no court will assist such person.