Blitz Bureau
NEW DELHI:THE Supreme Court recently ruled that insurers can reject health claims related to alcoholism if the policyholder concealed alcohol drinking habit while buying the policy, according to Live Law.
It approved the decision of the Life Insurance Corporation (LIC) to repudiate a claim over the hospitalisation of a policyholder under the “Jeevan Arogya” scheme since he gave false information regarding his habit of alcohol consumption. A Bench of Justice Vikram Nath and Justice Sandeep Mehta was deciding an appeal filed by the LIC against the order of the National Consumer Disputes Redressal Commission (NCDRC) which upheld the decisions of the State and District fora to pay ₹5,21,650 and costs to the claimant.
In this case, the claimant’s husband, Mahipal, took LIC’s “Jeevan Arogya” policy in 2013. Almost a year after taking the policy, the policyholder was admitted to the hospital due to severe abdominal pain. After a month’s hospitalisation, he died. The claim made by the widow of the policyholder was rejected by the LIC on the ground that the deceased had concealed material information regarding his chronic alcoholism.
The claimant then approached the Consumer Forum, which directed the LIC to reimburse the medical expenses. The Supreme Court disapproved of the approach taken by the NCDRC and the Consumer Fora. At the outset, the court noted that the Consumer Fora misconstrued the policy as a medical reimbursement policy. Even if the claim was upheld, the claimant was entitled only to the specified cash benefits.
The court examined the medical records, which clearly stated that the patient had a history of “chronic alcohol intake.” “The deceased’s alcoholism was a long- standing condition, which he knowingly suppressed while subscribing to the policy. Given this suppression of material facts, the appellant was justified in repudiating the claim under the exclusion clause,” the court observed.
