LIC rejects death claim citing ‘non-disclosure’ of hole in heart, man’s father wins Rs 5 lakh

“Death claim lodged by the complainant on account of the death of his son has wrongly and illegally been repudiated by the LIC, which constitutes a deficiency in service on their part, and the complainant is entitled to get relief,” said the commission on September 1.

Noting that the insured was 30 years old and in government service, and that he might have got a medical check-up and fitness certificate before joining the service, the commission said, “Even if we presume, even then, that the procedure was done in the year 2008, whereas the insurance policy in question was purchased in April 2022, i.e., after a period of near about 14-15 years, and he had died in August 2023.”

“So, it cannot be taken into consideration that the deceased had purchased the insurance policy with ill will or was having knowledge that he was suffering from a serious ailment before getting the policy in April 2022,” it added.

Father challenges LIC claim rejection

The complainant, being the nominee and father of the policyholder who died of a heart attack in August 2023, filed a complaint against the insurance company seeking directions to pay the insured amount of Rs 5 lakh.

According to the complainant, his son, during his lifetime, obtained an insurance policy in April 2022, having a maturity date in April 2043. The LIC had allegedly assured him that in the event of any mishap, the company would pay Rs 5 lakh to his legal heirs/nominee, who is also the father of the deceased.

After the son died, the father lodged a claim with the insurance company. However, it was rejected in January 2024, alleging that the deceased had suppressed crucial information about a pre-existing heart condition, including an ASD/VSD closure (hole in the heart) and a Fontan procedure (open-heart surgery) allegedly performed in 2008. An appeal against the rejection was also rejected.

The complainant challenged the rejection before the consumer commission, alleging deficiency in service. He argued that the alleged heart procedure had taken place when his son was a minor, more than 14 years before the policy was purchased, and that there was no evidence establishing a connection between that procedure and his son’s death.

Had a hole in his heart: LIC

LIC argued that the complainant’s son had a hole in his heart and had undergone an ASD/VSD closure/Fontan procedure in 2008, but failed to disclose this medical history while applying for the policy.

It was argued that he had answered the health-related questions in the proposal form as “no”, despite allegedly knowing about his chronic heart condition and treatment.

According to LIC, the non-disclosure of his pre-existing heart condition amounted to suppression of crucial facts. Had the condition been disclosed, LIC claimed it would not have issued the insurance coverage.

No medical record shown: Order

The commission found that LIC’s main ground for denying the claim was the alleged suppression of the deceased’s pre-existing heart condition in the proposal form.

“Although the LIC has stated in its repudiation letter dated January 2024 that the insured was suffering from ASD/ VSD closure/ Post Fonton procedure since the year 2008, no such medical record has been placed on file,” the order noted.

It noted that the first proposal form produced by LIC was only two pages long, did not bear the deceased’s signature or the date of submission, raising doubts about its reliability.

Takeaway

This judgment underscored that insurers cannot reject death claims solely on allegations of non-disclosure without producing reliable medical evidence. It also highlights the importance of establishing that an insured knowingly suppressed a material condition, particularly where the alleged treatment occurred years before the policy and the insurer’s proposal-form evidence was found unreliable.

Consumers facing similar grievances may contact the consumer helpline in their respective states (Punjab helpline: 1800-425-1082) or dial the National Consumer Helpline at 1915 for assistance.

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