Insurer denies woman’s death claim over ‘hidden illness’, son secures Rs 5 lakh payout

The commission ruled that the insurer’s preliminary objections – alleging that the complaint was non-maintainable or based on suppressed facts – became completely redundant due to the total lack of evidence on file to support those claims.

Son challenges rejection

The complainant’s mother allegedly died of natural causes on May 15, 2019. As her nominee, he submitted the death certificate and required documents to claim the insured amount.

The complainant alleged that the insurance company refused to pay the claim, alleging that the deceased had concealed pre-existing medical conditions and misrepresented facts in the application form.

After sending a legal notice that went unresolved, the complainant filed a complaint with the consumer commission demanding the claim along with interest and compensation for mental agony and legal costs.

Facts concealed: Insurer

The insurance company argued that the deceased policyholder made misrepresentations and concealed critical material facts regarding her health at the time of filling out the proposal form.

They claimed that non-disclosure of medical facts rendered the insurance contract void in the eyes of the law, asserting that the policy was taken to defraud the insurer.

Since the policy was purchased online through a digital credit marketplace, which is the master policyholder under the insurance company’s term insurance plan, the company stated that it was the duty of the master policyholder to ensure that all information provided in the Member Information Form (MIF) was true and correct.

Nominee entitled to insured amount: Order

The order noted that it has been established by the complainant that policy was duly issued by the respondents, and it was also admitted that a premium of Rs 4,755 was received by the respondents, and as per the terms and conditions of the policy, the complainant, being the nominee, is entitled to the insured amount in favour of his deceased mother.

The commission observed that although the insurance company claimed the deceased had concealed a pre-existing illnesses, they failed to place a single document or piece of medical evidence on record to prove she suffered from any disease before purchasing the policy.

Takeaway

The judgment underscored that insurers cannot reject claims merely by alleging concealment of pre-existing illnesses. They must support such allegations with documentary or medical evidence. The ruling reinforces accountability in insurance claims and protects nominees from unsupported repudiation of valid policies.

Consumers facing similar grievances may contact the consumer helpline in their respective states (Haryana: 1800-180-2087) or dial the National Consumer Helpline at 1915 for assistance.

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