The State Consumer Disputes Redressal Commission of Madhya Pradesh, led by Acting President Shri A.K. Tiwari and Member Dr. Srikant Pandey, rejected an appeal against LIC. The dismissal was based on the fact that the deceased insured had concealed crucial health information and inaccurately declared herself as ‘healthy’ while undergoing hospital treatment.
Case Summary:
The complainant’s deceased wife had purchased an insurance policy from Life Insurance Corporation of India (LIC) with a coverage amount of Rs. 1,00,000. The complainant, as the policy nominee, filed a claim following her death. However, LIC denied the claim, citing that the deceased had failed to disclose her true medical condition at the time of policy revival and had suppressed material facts.
The complainant contended that his wife was not ill but was in shock over their son’s death. Alleging a deficiency in service by LIC, he approached the District Consumer Disputes Redressal Commission in Morena, Madhya Pradesh.
LIC countered by stating that the policy had lapsed due to unpaid premiums from May 2013 to November 2014. It was revived on December 1, 2014, during which the deceased falsely claimed to be healthy despite being treated for Sinus Polycardia Right Axis at Rathi Hospital, Morena. LIC argued that this false declaration invalidated the policy revival.
The District Commission upheld LIC’s stance, leading the complainant to appeal to the State Commission.
Commission’s Observations:
The State Commission reviewed the case, including the repudiation letter and death certificates. It found that the deceased had incorrectly answered the revival proposal form, declaring no disease and current health, while she was being treated for a condition during the policy revival.
The Commission noted that insurance contracts are based on ‘utmost good faith.’ Concealing significant health information breaches policy conditions, disqualifying the claimant from any relief. Consequently, the State Commission concluded that LIC had acted properly in repudiating the claim and found no deficiency in their service. The appeal was dismissed, affirming the District Commission’s decision.
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