Insured Carries Responsibility Of Accurately Providing Details In Proposal Form, North Delhi District Commission Dismisses Complaint Against LIC

Brief Facts:

Smt. Sharda Khatri obtained a policy from the LIC with a total sum assured of Rs. 2 lakhs and a premium of Rs. 9608/-. The policy commenced on 28.12.2013, with the commencement of risk on 31.12.2013. Her Son (“Complainant”) was the nominee of the said policy. At the policy's initiation, Smt. Sharda was not afflicted with any diseases. However, she fell severely ill, leading to hospitalization, and subsequently passed away. Upon the death, the Complainant approached LIC for the insurance claim, which was allegedly rejected on the basis that the mother had a pre-existing disease. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission-I, North Delhi (“District Commission”) and filed a consumer complaint against LIC.

In response, LIC contended that the Complainant did not approach the District Commission with clean hands and suppressed material facts. The claim was repudiated on 24.03.2017, with an option provided to the Complainant to appeal the decision to the Zonal office. The Complainant allegedly failed to approach the appellate authority before turning to the District Commission.

Furthermore, LIC argued that the deceased had pre-existing health conditions, including DM-T2 (Diabetes type-2), CKD-ESRD (chronic kidney disease), Severe Anaemia, Metabolic Acidosis Dyspnea, as per the hospital treatment certificate from a previous admission. It claimed that the deceased did not disclose these conditions in the proposal/personal statement, providing false information about her health.

Observations by the District Commission:

The District Commission held that the allegations and averments made by the Complainant were not sustainable when compared with the medical records of his mother. It held that there is a settled position that the insured carries the responsibility of accurately providing details in the proposal form. This accurate disclosure is crucial to allow the insurance company to make informed decisions on whether to accept the proposal for insurance or subject the insured to further investigations before providing policy coverage. It held that the reply and documents submitted by LIC convincingly demonstrated that the deceased provided incorrect information in the proposal form to obtain the insurance policy in question.

Therefore, the District Commission held that LIC has rightfully repudiated the claim made by the Complainant. Consequently, the complaint was dismissed.

Case Title: Karan Khatri vs LIC of India

Case Number: Consumer Complaint No. 210/2017

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