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Multiple Policies In Short Span, Different Name Variations Shows Knowledge Of Pre-Existing Illness: Mysore Commission Dismisses Complaint Against LIC
Smita Singh
11 April 2025 4:47 AM
The District Consumer Disputes Redressal Commission, Mysore (Karnataka) bench of A.K. Naveen Kumari (President), M.K. Lalitha (Member) and Maruthi Vaddar (Member) held that when an insured person obtains multiple insurance policies within a short span and uses different name variations and involving different agents, it suggests that he was aware of a pre-existing illness. The bench held...
The District Consumer Disputes Redressal Commission, Mysore (Karnataka) bench of A.K. Naveen Kumari (President), M.K. Lalitha (Member) and Maruthi Vaddar (Member) held that when an insured person obtains multiple insurance policies within a short span and uses different name variations and involving different agents, it suggests that he was aware of a pre-existing illness. The bench held that insurance contracts are based on 'utmost good faith' and that a failure to disclose material facts would vitiate the entire policy.
Brief Facts:
The Complainant's father took an insurance policy from Life Insurance Corporation of India (“LIC”) for a sum assured of Rs. 2,00,000/-. Subsequently, the LIC's agent persuaded his father to take another policy on the same day. Accordingly, the second policy was taken for a sum assured of Rs. 1,50,000/-. The Complainant's father paid three instalments for each policy. In 2023, he died a natural death. Following his demise, the Complainant filed the claim form, but LIC repudiated the claim. It contended that the Complainant's father concealed his pre-existing disease. Feeling aggrieved, the Complainant filed a consumer complaint before the District Consumer Disputes Redressal Commission, Mysore (“District Commission”). The Complainant contended that her father was not suffering from any pre-existing disease, yet LIC wrongfully refused to pay the sum assured of Rs. 3,50,000/- under the two policies.
In response, LIC contended that the proposer must disclose all material facts to enable the insurer to assess the risk accurately. The Complainant's father was suffering from liver-related conditions. However, he deliberately concealed it to obtain the policy fraudulently.
Observations by the District Commission:
The District Commission referred to the medical records and noted that the Complainant's father was admitted to Vivekananda Memorial Hospital on multiple occasions before obtaining the insurance policies. He was admitted with a final diagnosis of “Chronic Liver Disease with Portal Hypertension and Massive Ascitis”. Further, in 2019, he was admitted with complications including “Chronic Liver Disease with Portal Hypertension, Hepatorenal Syndrome, and Septic Shock”.
The District Commission noted that the Complainant's father obtained four insurance policies within a short span of three months. Further, he used different variations of his name and involved multiple agents. This conduct raised serious doubts about his intent. Therefore, the District Commission observed that his actions strongly suggested that he was aware of his critical illness and deliberately concealed it to secure insurance coverage.
The District Commission referred to the decision of the Supreme Court in Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod [2019 (6) SCC 175], wherein it was held that a contract of insurance is based on the principle of 'utmost good faith' and any suppression of material facts vitiates the policy. As a result, the District Commission held that the repudiation of the claim by LIC was justified. Accordingly, the complaint was dismissed.
Case Title: Uma Maheshwari vs Zonal Manager, LIC of India and Anr.
Case Number: 164/2024
Advocate for the Complainant: Naveen Kumar
Advocate for the Opposite Party: S. Vageesh