Material Facts

• Defined as those which would influence the judgement of a prudent insurer in fixing the premium or determining whether it will take the risk

• Material facts help company underwriters to decide

1.  Whether to accept the risk proposal or to reject it.
2.   If the proposal is to be accepted, then at what price it should be accepted.

By common Law, insurer interest is deemed to exist in the following circumstances:

• Own Life - self(Unlimited cover)
• Spouse - wife
• Children's  Life
• Assets

In Life Insurance, insurable interest should be present at the time of taking the policy. In general Insurance, insurable interest should be present both at time of taking the policy and at the time of claim with some exceptions like marine policies.