Man withheld vital information: NCDRC denies insurance claim

The apex consumer commission has denied insurance claim to the wife of a man, who was insured with LIC and died in 1999, noting that he had withheld material information at the time of taking the policy.
National Consumer Disputes Redressal Commission (NCDRC), presided by Justice D K Jain, denied the insurance claim while setting aside the order passed by Rajasthan State Consumer Disputes Redressal Commission, in which the state commission had asked the insurance company to pay Rs 1.03 lakh to Neelam Sharma, a resident of Ajmer, Rajastan.
"...We are of opinion that the answers given by insured in proposal form were untrue to his knowledge. There was clear suppression of 'material facts' in regard to the health of the insured," the NCDRC bench said.

It added that it was not for insurer Krishanavtar Sharma, to determine whether information sought for in questionnaire was material for the purpose of the two policies.
"At any rate, the statements made in the proposal form were untrue and incorrect...We are, therefore, of the opinion that the insurance company was justified in repudiating the claim of the respondent," it said.
Krishanavtar Sharma had taken two life insurance policies of Rs 50,000 each from the company. During the validity period of the policies, he died due to heart attack on December 31, 1999.

On the death of her husband, Neelam Sharma sought a claim from the company. The claim, however, was repudiated on the ground that Krishanavtar had suppressed material information regarding his health at the time of taking the life insurance policies.

The company contended before the commission that as per information available with it, two years prior to taking the policies, Krishanavtar had been suffering from Amoebic Liver Abscess and had also been hospitalised in this connection in June 1997.
But these material facts were not disclosed by him in the proposal form and, therefore, it was not liable to pay assured amount under the policies, it added.
Earlier, when Neelam had approached a district consumer forum against the company's refusal to give claim, the forum had asked the firm to pay Rs 1,03,000 to the woman. The forum's order was also upheld by Rajasthan State Consumer Commission.