Health Insurance Disclosures: Honest, comprehensive declarations key to successful claims

In a recent ruling, the Supreme Court overturned the National Consumer Disputes Resolution Commission's order and upheld Life Insurance Corporation (LIC) of India's decision to deny a claim due to non-disclosure of alcohol consumption.

- HIMALI PATEL

The insured had purchased Jeevan Arogya, a hospitalization cash benefit policy. The court held that long-term alcohol use was a material fact, and failure to disclose it justified claim rejection after the policyholder's death.

Insurance, say experts, is based on the principle of utmost good faith. "This verdict reinforces the importance of transparency and full disclosure in the proposal form to ensure successful claim settlement," says Shilpa Arora, co-founder and chief operating officer (COO), Insurance Samadhan.

Customers must disclose habits like smoking and alcohol consumption, regardless of frequency. "Whether it is occasional or regular, buyers must disclose alcohol consumption and smoking honestly. This information can influence premiums and claim settlement," says Arora. Quantification is important. "Be specific: say that I drink, for instance, 30 ml (one peg) in a week, a month, or a quarter," says Kapil Mehta, co-founder, SecureNow.