Question:medium

A takes a life insurance policy making a false statement about his health and does not disclose the fact that he has been treated for a serious illness. In this case which one of the following statements is correct:

Updated On: Jul 13, 2026
  • The Contract is void
  • The Contract is valid
  • Contract is voidable on the ground of fraud
  • Contract is voidable on the ground of misrepresentation
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The Correct Option is C

Solution and Explanation

The line between fraud and misrepresentation comes down to one question: did the person know the statement was false when they made it. Applying that test here settles the answer quickly.

  1. The Contract is void: void contracts are ones defective from the start, for reasons like an unlawful object or absence of consideration, a lie by one party does not erase the contract's existence, it only gives the other party a choice about whether to keep it.
  2. The Contract is valid: a valid contract binds both parties as intended, but the whole reason insurance law demands disclosure of health facts is that a policy taken out on false health information is not meant to bind the insurer as if nothing were wrong.
  3. Contract is voidable on the ground of fraud: the applicant knew about the serious illness and chose to hide it while also making a false statement. That combination, a known falsehood plus intent to get the policy issued on false terms, is textbook fraud, and Section 19 gives the insurer the option to avoid the contract because of it.
  4. Contract is voidable on the ground of misrepresentation: this ground fits someone who believed their statement was true, for example someone unaware of a mild condition, but here the person had actually been treated for the illness and still denied it, so it cannot be called an honest error.

Because the concealment was knowing and deliberate rather than an honest mistake, it crosses the line from misrepresentation into fraud.

The correct answer is Contract is voidable on the ground of fraud.

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