Consumer Forum dismisses health insurance claim complaint against LIC

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The District Consumer Disputes Redressal Commission-I, North Delhi bench, consisting of Divya Jyoti Jaipuriar (President) and Ashwani Kumar Mehta (Member), recently dismissed a complaint against the Life Insurance Corporation of India (LIC). The commission noted that the insured carries the responsibility of accurately providing details in the proposal form. In this case, the insured failed to disclose pre-existing health conditions in the proposal form, and LIC rightfully repudiated the claim.

Background of the Case

Smt. Sharda Khatri obtained a policy from LIC with a sum assured of Rs. 2 lakhs and a premium of Rs. 9608/-. The policy commenced on December 28, 2013, with the commencement of risk on December 31, 2013. Smt. Sharda’s son was the nominee of the policy. At the time of policy initiation, Smt. Sharda did not have any diseases. However, she fell severely ill, leading to hospitalization and subsequently passed away. The complainant, her son, approached LIC for the insurance claim, which was allegedly rejected on the basis that the mother had a pre-existing disease. Feeling aggrieved, the complainant filed a consumer complaint against LIC with the District Consumer Disputes Redressal Commission-I, North Delhi.

LIC’s Response

LIC contended that the complainant did not approach the District Commission with clean hands and suppressed material facts. The claim was repudiated on March 24, 2017, with an option provided to the complainant to appeal the decision to the Zonal office. However, the complainant allegedly failed to approach the appellate authority before turning to the District Commission. LIC further argued that the deceased had pre-existing health conditions, including Diabetes type-2, chronic kidney disease, severe anemia, metabolic acidosis dyspnea, as per the hospital treatment certificate from a previous admission. LIC claimed that the deceased did not disclose these conditions in the proposal form, providing false information about her health.

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Decision of the District Commission

The District Commission carefully examined the allegations and averments made by the complainant and compared them with the medical records of the deceased. The commission held that the insured carries the responsibility of accurately providing details in the proposal form. Accurate disclosure is crucial for the insurance company to make informed decisions on whether to accept the proposal for insurance or subject the insured to further investigations before providing policy coverage. In this case, the reply and documents submitted by LIC convincingly demonstrated that the deceased provided incorrect information in the proposal form to obtain the insurance policy in question. Therefore, the District Commission held that LIC rightfully repudiated the claim made by the complainant, and as a result, the complaint was dismissed.

In conclusion, the District Consumer Disputes Redressal Commission-I, North Delhi bench dismissed a complaint against LIC, noting that the insured carries the responsibility of accurately providing details in the proposal form. The commission found that the insured failed to disclose pre-existing health conditions, and LIC rightfully repudiated the claim.

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