Insurance claims: The Supreme Court recently gave a very important decision related to insurance. It made it clear that if the insured hides any information, his claim can be rejected. In particular, hiding the habit of drinking alcohol can cancel the insurance claim, even if the cause of death is not related to alcohol.
What is the whole matter of insurance claim
The matter is related to a person who bought a ‘Jeevan Arogya’ policy from Life Insurance Corporation of India (LIC) in 2013. While filling the application, he did not say that he has been drinking alcohol for a long time. Within a year of buying insurance, he was admitted to the hospital due to a serious stomach pain problem in Jhajjar, Haryana. After a month of treatment, he suffered a heart attack and died.
His wife filed an insurance claim for treatment expenses, but LIC rejected it by saying that the deceased had hidden information about his alcohol habit. The insurance company argued that their policy clearly does not cover diseases caused by a person’s own habits, behavior or negligence. It also includes the disease caused by excessive consumption of alcohol.
Decision came in favor of wife in consumer forum
Initially, the District Consumer Forum ruled in favor of the deceased’s wife. He ordered LIC to pay Rs 5.21 lakh. The State and National Consumer Commissions also upheld the decision, saying that the death was caused by a heart attack, not a liver related disease. However, LIC challenged the decision in the Supreme Court.
Supreme Court pronounced decision in favor of LIC
A bench of Justices Vikram Nath and Sandeep Mehta of the Supreme Court overturned the decisions of the Consumer Commissions and ruled in favor of LIC. The court said that it was not a general insurance policy, but a specialized health insurance plan, which had strict rules.
The Supreme Court also clarified that “alcohol diseases do not occur in a day.” The deceased had been consuming alcohol for a long time, and he had given wrong information by hiding this fact. This was the reason that it was appropriate to dismiss the claim of LIC.
However, the court did not order the widow’s financial condition to return her to Rs 3 lakh already received.
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