Policyholder dies, insurer rejects claim over pre-existing diseases: ICICI ordered to pay Rs 8.5 lakh to widow

‘Wrongly rejected claim’

• We would like to refer to precedents where common lifestyle diseases such as hypertension and diabetes are not considered grounds for repudiation unless they are directly linked to the cause of death.

• The Supreme Court in Sulbha Prakash Motegaonkar and Ors v LIC of India, although it was proved that the insured therein had concealed regarding his pre-existing disease, but he died on account of some other reason, allowed the consumer complaint while holding that the disease from which the insured had died has no nexus with the pre-existing disease.
• This principle is particularly relevant in cases involving lifestyle diseases such as hypertension or diabetes, where it is well-recognized that these conditions may not be directly linked to certain fatal events, unless there is medical evidence to establish such a connection.
• In view of the principle of law laid down by the Supreme Court and also the National Commission, in the above-mentioned cases, we are of the view that there was no nexus between the cause of death of the insured and the alleged preexisting disease.
• Had the life assured expired owing to the said ailments, the said factum would have been clearly recorded in the death summary or other treatment record.
• In the absence of any such finding, we are not inclined to accept the contention of the opposite party that the pre-existing disease was the direct cause of the death of the life assured.
  We opine that the opposite party wrongly rejected the claim in the guise of nondisclosure of pre-existing disease.

Policy claim rejected over prexisting health conditions

The case originated from a complaint filed by the wife of the late Ambati Rajender, Sunanda, against Vastu Housing Finance Corporation Ltd and ICICI Prudential Life Insurance Company Ltd.

The man had taken a housing loan and obtained an ICICI Pru Super Protect Credit Insurance Policy through the finance company. The policy provided a death benefit of Rs 10 lakh, and his wife was the nominee.

A premium of Rs 26,906 was paid, and the policy was valid from April 1, 2023, to April 1, 2025. The man died on August 1, 2023, due to a heart attack, and immediately the matter was reported to the opposite parties, and material claim papers were submitted in the office through courier/registered post.

However, ICICI Prudential rejected the claim in September 2023, alleging that he had concealed pre-existing conditions such as hypertension, diabetes, fatty liver, and heart-related issues while taking the policy.

The wife argued that her husband had not hidden any health information, the insurer had accepted the proposal after medical checks, and the alleged disease had no connection with his cause of death. She alleged a deficiency in service and unfair rejection of the claim.

In hearing, the court noted that the Vastu Housing Finance Corporation Ltd had been absent and the ICICI Prudential Life Insurance Company Ltd set ex parte through a docket order.