Pre-existing disease no ground for denying insurance claim: Panel

Chandigarh, January 14

An insurance company cannot escape from its liability on the grounds that the deceased had concealed facts about his pre-existing disease.

Observing this, the District Consumer Disputes Redressal Commission, UT, has directed DHFL Pramerica Life Insurance to pay a compensation of Rs 60,000 to a woman for denying claim of a policy after her husband’s death. The commission also directed the company to pay a coverage amount of the policy (Rs 10,07,168) with interest at the rate of 9 per cent per annum from the date of the death of the insured person.

Manju Bala, a resident of Mohali, in a complaint filed through counsel Jyoti Mehta, said her husband Naresh Kumar had applied for home loan from the HDFC, Chandigarh. The bank sanctioned Rs 9,50,000 loan on April 25, 2019. Thereafter, her husband purchased an insurance policy from DHFL Pramerica Life Insurance Company in order to secure the home loan. The premium amount was also paid by her husband. It was assured that in case of any casualty to the insured, the entire loan amount shall be borne by the insurance company. She said during his lifetime, her husband paid the installments, but he fell sick later and died on August 18, 2019. She applied for the insurance claim, but the company declined her plea on January 24, 2020, on the grounds that the cause of the death of her husband was due to heart disease and the fact was concealed by him to the firm.

In its reply, the insurance company stated that at the time of the purchase of the policy, all terms and conditions of the same were explained to the deceased, who had, under medical questionnaire in the proposal form, declared that he was not suffering from any disease or disorder nor he had suffered from any disease in the past.

The company said the deceased was diagnosed with blood cancer and body ache, but it was not disclosed by him in the proposal form as well as while filling the health declaration of the proposal form. Even during the investigation, the investigator had discovered that the deceased died on account of a chronic kidney disease, a chronic liver disease and diabetes from which the deceased was suffering for the past several years.

After hearing of the arguments, the commission held the company guilty of deficiency in service. The commission said one thing was clear from the terms and conditions of the policy that nothing had been contained therein that in case of any pre-existing disease of the insured, he would not be entitled to the insurance claim, rather it contained that if an insured member died while the policy was in force, the insurance coverage would be payable to the claimant.

Similarly, the exclusion clause did not contain that in case the insured died due to some pre-existing disease after the purchase of the policy, he shall not be entitled to any claim. Moreover, the medical evidence relied upon by the insurance company indicated that the deceased was found diagnosed with multiple myeloma three months after the issuance of the policy.