Health Insurance Claim can not be Rejected Over Pre-Existing Conditions if Medical Test not conducted prior to issuing Policy
New Delhi: The Delhi State Consumer Disputes Redressal Commission has ruled that denying an insurance claim on the grounds of pre-existing ailments is unjustified when no medical tests are conducted prior to issuing the policy. A bench comprising Justice Sangita Dhingra Sehgal and Judicial Member Pinki observed that common lifestyle conditions like diabetes and hypertension cannot be treated as pre-existing diseases.
Case Background
The case involved a complainant who purchased an Overseas Mediclaim Insurance policy from Oriental Insurance Co. Ltd. During her visit to Singapore, she experienced heart complications and underwent a medical procedure. Her son immediately informed the insurance company and requested cashless payment for the treatment. However, the company refused, requiring her to pay upfront and later apply for reimbursement.
Despite submitting the required documents and a legal notice demanding payment, the company failed to reimburse the medical expenses, prompting the complainant to file a complaint with the consumer forum seeking compensation.
District Commission’s Decision
Initially, the District Consumer Forum ruled in favor of the insurance company, stating that the claim was invalid due to a pre-existing condition. Dissatisfied with this decision, the complainant appealed to the Delhi State Commission.
Arguments Presented
Insurance Company’s Stand:
- The company argued that the claim was rightly denied as the treatment was linked to a pre-existing condition.
- Clause 11 of the policy excluded claims arising from pre-existing ailments, even if the insured was unaware of the condition.
- The company submitted a medical expert’s opinion asserting the presence of pre-existing diseases.
Complainant’s Stand:
- The complainant contended that no medical examination was conducted when the policy was issued.
- The medical expert’s opinion was disputed, as it was not supported by an affidavit.
Commission’s Observations
The State Commission referred to the precedent set in Pradeep Kumar Garg vs. National Insurance Co. Ltd. (FA 482/2005), which held that a condition cannot be deemed pre-existing unless the individual had been hospitalized for it or had prior medical knowledge of it.
The bench also cited Sunil Kumar Sharma vs. TATA AIG Life Insurance Co. & Ors. (Revision Petition 3557/2013), where the National Commission ruled that denying claims for lifestyle diseases such as diabetes and hypertension without conducting medical tests was unjustified.
In the present case, the bench noted that the complainant’s claim was rejected on the grounds of common lifestyle diseases like hypertension, diabetes, and hypercholesterolemia. Since no medical tests were performed before issuing the policy, the company could not repudiate the claim based on pre-existing conditions.
Judgment and Relief Granted
The Delhi State Commission found Oriental Insurance Co. Ltd. guilty of deficiency in service and overturned the District Commission’s decision. The following reliefs were awarded to the complainant:
- ₹13,46,735/- along with 6% annual interest.
- ₹1,00,000/- for mental agony and harassment.
- ₹50,000/- as litigation costs.
The appeal was allowed, and the insurance company was directed to honor the claim. This judgment underscores the obligation of insurers to conduct due diligence before denying claims on the grounds of pre-existing conditions.
