Jind District Commission Directs LIC To Disburse Amount And Pay Compensation For Wrongful Repudiation Of Jeevan Arogya Policy Claim

The District Consumer Disputes Redressal Commission, Jind (Haryana) bench comprising of A.K. Sardana (President) and Neeru Agarwal (Member) held the Life Insurance Corporation (LIC) liable for deficiency in service for false repudiation of the claim filed by the Complainant stating that benefits of the policy were fixed and not dependent on the actual expenses incurred during the treatment. Further, LIC failed to disburse the expenses incurred by the Complainant towards his surgery stating it was not a “Major Surgery”. The bench directed it to reimburse the claim and pay a compensation of Rs. 20,000/- to the Complainant, along with Rs. 10,000/- litigation expenses.

Brief Facts:

Mr. Neeraj Kumar (“Complainant”) purchased a Jeevan Arogya Policy from Life Corporation of India (“LIC”). In February 2017, the Complainant suffered injuries in a bike accident and was taken for treatment to Medanta Hospital, Gurugram (“Hospital”). The Complainant incurred medical charges of Rs. 1,96,249.20/- and Rs. 4,320.95/- for medicines, totalling Rs. 2,00,569/-. Despite assurances from LIC, the Complainant received only Rs. 46,200/- through NEFT, leaving an outstanding amount of Rs. 1,54,369/- unpaid. The Complainant's subsequent request for initiation of the claim was denied by LIC, stating that health insurance benefits were fixed and were unrelated to actual medical expenses by the Complainant. The Complainant made several communications with LIC but didn't receive any satisfactory response. Feeling aggrieved, the Complainant filed a consumer complaint against the District Consumer Disputes Redressal Commission, Jind, Haryana (“District Commission”).

In response to the complaint, LIC raised preliminary objections, contending that the complaint was not maintainable and that the Complainant didn't approach the District Commission with clean hands. LIC argued that the Complainant didn't pay a premium for Feb 2017, leading to the policy being labelled as "foreclosed." It argued that the policy was a fixed benefit policy, unlike mediclaim policies, and payments are based on the benefits purchased rather than the actual expenses incurred during the treatment. It asserted that the Complainant's claim was duly considered, and an eligible claim amount of Rs. 46,200/- was imitated in favour of him. However, the remaining claimed amount was deemed non-payable as the surgery undergone by the Complainant was not covered under the "Major Surgery" mentioned in the policy. 

Observations by the Commission:

The District Commission referred to the treating doctor's opinion on whether the surgery undergone by the Complainant fell under the category of “Major Surgery” stated in the insurance policy. The doctor opined that there is no specific criterion to define Major or Minor Surgery, and any orthopaedic procedure is considered a major surgery. The District Commission, therefore, held that LIC wrongly repudiated the remaining health claim by not categorizing the surgery as “Major Surgery”.

Additionally, the District Commission noted that no list of surgeries was ever supplied to the Complainant along with the policy document. Therefore, the District Commission held LIC liable for deficiency in services and unfair trade practices by not reimbursing the total medical expenses as legally entitled to the Complainant. Consequently, it directed LIC to pay/reimburse the balance amount of Rs. 1,54,369/- to the Complainant, along with simple interest @ 9% per annum from the date of reimbursing the partial Mediclaim payment of Rs. 46,200/- (25.03.2017) until the date of payment. It was also directed to pay a sum of Rs. 20,000/- to the Complainant for mental agony and physical harassment and Rs. 10,000/- litigation expenses.

Case Title: Neeraj Kumar vs Life Insurance Corporation of India and another

Case No.: 542 of 2021

Advocate for the Complainant: Complainant-in-person.

Advocate for the Respondent: Rampal Singh

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