Force Majeure Clause-What it is in Life Insurance In India?

Force Majeure Clause-What it is in Life Insurance In India?

Force Majeure is a contract clause means that will remove the LIABILITY due to catastrophic events such as natural disasters or war in Life Insurance in India.


What is Force Majeure?

Now, many countries are under lockdown worldwide due to fear of Pandemic Virus COVID-19 ( Corona Virus).

Though the death rate due to this virus is low, this is spreading easily and fast from human to human.

In addition, People do not when this lockdown will be over and when the vaccine for this virus will come.

Mean While there is a high chance that people across the world may die in some lakhs and crores.

If that happens,  are the life insurance companies will be able to pay the death claims due to this virus?.

The above question may have arisen for some of you.

Some of you may have seen the famous Telugu movie “Gopala Gopala”.

Hero of this movie insures his shop in a general insurance company.

One day, his shop gets damaged completely due to an earthquake.

But the insurance company rejects his claim saying that they will not cover the “Act of God” and it is also mentioned under the policy conditions.

The Force Majeure is French Term that literally means “Great Force”.

In addition, it is related to “The concept of Act of God”.

Moreover, this Force Majeure clause will work in such a way it will exclude one or two parties from the liability to perform.

Further, You can read more about this clause in Wikipedia.

For example, a function at a venue can come under Force Majeure if there is a big heavy flood.

But not in case of rain.

What this Clause says in Life Insurance in India?…

Life Insurance in India is a contract between the Policyholder and the Life Insurance Company.

In addition, Your obligation is to pay the premiums on time every year and the obligation for the life insurance company is to pay death claim or maturity claim in the future.

But sometimes, Life Insurance may put some restrictions while paying death claim to you in certain cases.

One such case is Force Majeure.\

Now, let’s read this clause in Indian Life Insurance.

Force Majeure Claue in Life Insurance in India
Force Majeure Claue in India


So, It is very clear that Life Insurance Companies may breach the contract under Force Majeure in case of  “Act of God”, strike, lockout legislation or restriction by any government.

However, before applying this clause, the Life Insurance Company should take prior approval from IRDAI in India.

Does Corona Virus or COVID – 19 will fall under Force Majeure in India?…

No, The deaths under Corona Virus will not come under Force Majeure according to IRDAI.

So, all life insurance companies including Lic and private life Insurance companies have to pay the death claims due to the COVID-19 virus.

Moreover, read this article about ” Can a Life Insurance Company go bankrupt?

Every Life Insurance Company must have a 1.5 times solvency ratio with IRDAI at all times.

That means if a Life Insurance company has done 100 policies, then it must have the solvency ratio with IRDAI to pay 150 claims.

Finally,  Do not fear of death claim due to the  COVID-19 and be safe at your home and co-operate to the  LockDown in India to fight against this deadly pandemic virus.












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