Mumbai University Solved Question Papers
Law of Insurance
Previous Year Question Paper with Solution
LLB 3 years · Sem 6
May 2012 Examination
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LLB 3 years Sem 6 Law of Insurance May 2012 Question Paper with Solutions
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First published on munotes.in on 24 October 2026.
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Model answers written and edited by the munotes.in editorial desk.
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The question paper reproduced here is the paper as set by the University of Mumbai at the May 2012 examination.
Contents
The questions below are the paper as the University of Mumbai set it at the May 2012 examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the May 2012 examination, reproduced as the University of Mumbai set them, in the order it set them. Nothing has been reworded, added or left out. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 25 questions answered
Instructions printed on the paper
- N.B: (1) Figures to the right indicate full marks. (2) Answer all questions on separate sheet of the answer paper.
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
1.
Q.1: Write short answers, not more than two sentences
20 Marks - 2 marks each
(a)What is Lapse of Policy?[2]
Answer
Meaning. A life policy lapses when a renewal premium is not paid by the end of the grace period. Once lapsed, the policy gives no cover, and the insured can no longer claim its benefits.
When it happens. The grace period is fifteen days for monthly premiums and thirty days for others, under the IRDAI's 2024 circular. A death within it is covered. A death after it, on a lapsed policy, is not.
What softens it.
- Paid-up value. A non-linked policy that has acquired a surrender value does not lapse fully. It continues for a reduced paid-up sum insured (section 113(3) of the Insurance Act, 1938).
- Notice of options. The insurer must tell the policyholder his options within three months of the unpaid premium, unless the policy states them (section 50).
- Revival. A lapsed policy may be revived within the period the policy allows, on paying the arrears with interest and proving good health.
A case. In Life Insurance Corporation of India v. Anuradha, [2004] 3 SCR 629, insured men disappeared and their premiums stopped. Their families later claimed on a presumption of death after seven years. The Supreme Court held that the policies had lapsed. LIC had to pay only their paid-up value, because the premiums had not been kept up.
Conclusion. Lapse is the end of the cover when a premium stays unpaid after the grace period. It is subject to the paid-up value and the right to revive.
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