Supreme Court: Concealing Drinking Habit Justifies Rejection of Health Insurance Claim for Alcohol-Related Hospitalisation

The Supreme Court in the case Life Insurance Corporation vs Sunita and others observed and has ruled that the insurers can reject health claims which relates to alcoholism if the policyholder concealed alcohol drinking habit while buying the policy.

- TDG NETWORK

The Supreme Court in the case 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.

The bench comprising of Justice Vikram Nath and Justice Sandeep Mehta was hearing the present matter.

An appeal was 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 an amount of 5,21,650 and costs to the claimant.

In the present matter, the claimant's husband, Mahipal, took LIC's "Jeevan Arogya" policy in 2013. The policy provided hospital cash benefits, entitling the insured to daily cash payments of 1,000 for non-ICU hospitalization and 2,000 for ICU hospitalization. Almost a year after taking the policy, the policyholder was admitted to the hospital due to severe abdominal pain. He dies, after a month's hospitalisation.

On the other hand, the claim was made by the widow of the policyholder which the LIC rejected on the ground that the deceased had concealed material information regarding his chronic alcoholism.