Insurance firms draw flak for misinterpreting 'pre-existing illness' clause

THE State Consumer Disputes Redressal Commission (SCDRC) has criticised insurance companies for misinterpreting the clause on "pre-existing illness" to reject legitimate claims.

- M S VIDYANANDAN @T'Puram

While disposing of a case related to a claim rejection by the Life Insurance Corporation of India (LIC), the commission clarified that a pre-existing disease pertains to treatment received within 48 months prior to the issuance of the first policy.

The LIC had rejected a claim filed by a Pathanamthitta native, citing non-disclosure of a pre-existing illness.

The policyholder had taken a 'Health Protection Plus' plan covering himself, his wife, and two children for the period from May 2011 to May 2027, with an annual premium of ₹30,000.

In July 2015, he underwent treatment at the Kovai Medical Centre and Hospital in Coimbatore for large hepatocellular carcinoma.

The Third Party Administrator (TPA) denied his claim of ₹5 lakh on the grounds that he had undergone a laparotomy for bowel obstruction in 1982, classifying it as a pre-existing condition.