Can an insurance company reject a claim stating the non-disclosure of pre-existing conditions if the cause of the claim is in no way related to the pre-existing condition? This was the question before the Consumer Disputes Redressal Commission of Delhi. The case in discussion is between Anita Gupta and HDFC Standard Life Insurance Company Limited.
What’s on this page?
Here are the timelines of the event that led to the judgment:
March-2017- Mr. Gupta (Anita’s husband) purchased a policy named HDFC Life Group Credit Plus Insurance plan that includes health insurance cover for a sum insured of Rs.19,42,176/-. The policy period is 29/03/2017 to 28/03/2018. Premium paid Rs. 95,652.17/-.
August- 2017- Mr. Gupta expired in the hospital due to diabetes mellitus, chronic liver disease, and portal hypertension.
2017-2024 – After the death of Mr. Gupta, Anita approached the insurance company for claim settlement. To her surprise, the insurance company rejected the claim stating that the policyholder had not disclosed a pre-existing condition (diabetes mellitus) at the time of taking the policy. The insurer has further pointed out that the policyholder has violated the basic condition of insurance “Utmost good faith” which states that neither customer nor the insurance company should hide any material facts that could impact the underwriting decision. Insurance company in this case argued that, had it known the pre-existing condition of the policyholder, it would have not insured him or underwritten on different terms and conditions and therefore this claim cannot be settled due to the breach of basic conditions of insurance.
Aggrieved by this Anita approached the Delhi consumer redressal commission against the insurer demanding the claim payment and an additional compensation for mental agony. The main points noted by the commission are as follows:
The death of Mr. Gupta is not due to any pre-existing condition (diabetes) and therefore the claim cannot be rejected. The commision said that there was no document to prove that diabetes was a pre-existing condition and it existed at the time of taking the policy. The commission also further noted that even if we assume that the policyholder had diabetes as pre-existing conditions, the claim should not be rejected as these are the common lifestyle diseases.
Final Verdict:
HDFC Life insurance was directed to provide a compensation of Rs.19,42,176/- with an interest of 6% calculated from the date of claim. At 6% interest rate the complainant would most probably get Rs.28 Lakhs till the amount payable date 12/03/2024.
FAQs:
1. Should I declare my pre-existing conditions before taking insurance?
Yes. It is very much advisable to declare all your pre-existing conditions before taking any insurance policy as it can influence the underwriting decisions.
2. Is health checkup mandatory before taking a health insurance policy?
Depends. Not every health insurance mandates a health insurance checkup, but it is highly advisable to undergo a medical checkup so that your body condition would be known to the health insurance company and cannot reject any claim stating non-disclosure of material facts.
3. What are lifestyle diseases?
Lifestyle disease is a condition or disorder that is a result of a person’s lifestyle, such as diabetes, hypertension and obesity etc.
4. Are pre-existing conditions covered in health insurance?
Pre-existing conditions are covered in a health insurance policy after a waiting period that can go up to 4 years.
5. What is a pre-existing condition?
Insurance regulatory and development authority of India has defined a pre-existing conditions as “any condition/ ailment/ injury or disease:
That is diagnosed by a physician within 48 months prior to the effective date of the policy issued by the insurer or its reinstatement.
(OR)
For which medical advice or treatment was recommended by, or received from, a physician within 48 months prior to the policy’s effective date issued by the insurer or its reinstatement.”
