Refuting HDFC Standard Life Insurance Company Ltd's contention that the deceased life insured (DLI) failed to disclose pre-existing medical conditions, the national consumer disputes redressal commission (NCDRC) ruled that the DLI died due to head injury in a road accident which is independent of his stated medical conditions. NCDRC directed HDFC Standard Life Insurance to pay a Rs50 lakh death insurance claim with an interest of 9%pa (per annum) to the wife of the DLI.
In an order earlier this month , the NCDRC bench of air vice-marshal (AVM) J Rajendra (retd) (presiding member) said, "Since the DLI died from a road accident, which is entirely independent of his undisclosed ailments, the complainant is entitled to the insurance claim under the policy. The insurance company's repudiation of the claim is therefore untenable, and the complainant is entitled to receive the insured sum for the accidental death of the DLI."
The case is related to an HDFC Life Click-2 Protect+ insurance policy of Rs50 lakh bought by Indore-based Dilip Kumar Singh on 28 June 2015. However, on 16 August 2015, while returning from Omkareshwar to Ujjain during the Kavad Yatra, he met with an accident near Baigram on the Indore-Khandwa road and died. Following his death, his wife, Neeta Singh, submitted a claim to HDFC Standard Life Insurance. However, it was rejected on the grounds that material facts about the previous health conditions of Mr Singh were not disclosed in the proposal form.
Ms Singh then filed a complaint before the Madhya Pradesh state consumer disputes redressal commission.
In its reply, HDFC Standard Life Insurance submitted that its investigation revealed that Mr Singh was suffering from diabetes mellitus, coronary artery disease, triple vessel disease and myocardial infarction and had undergone angioplasty before taking the insurance policy. "He had also been diagnosed with coronary artery disease before obtaining the policy. Since these material facts were concealed by the insured at the time of policy issuance, the claim on the insured was not payable."
While dismissing the complaint of Ms Singh, the state commission stated Mr Singh was treated in CHL Hospital between 30 December 2012 and 2 January 2013 and this information was not provided in the proposal form. "Therefore, refusal of the claim by the insurance company cannot be treated as a deficiency in service," it says.
Ms Singh then filed her first appeal before NCDRC. The counsel for Ms Singh contended that Mr Singh, the DLI, underwent a complete medical examination by HDFC Standard Life Insurance on 12 June 2015 before issuing the policy. He says, "The investigation confirmed that Mr Singh died in a road accident, and the alleged nondisclosure had no relevance to the cause of death."
The counsel for HDFC Standard Life Insurance argued that Mr Singh was duty-bound to reveal all relevant facts to the insurer to determine the policyholder's eligibility for insurance. She further argued that since he failed to disclose material facts involving his health, that he was suffering from diabetes mellitus, coronary artery disease, triple vessel disease and myocardial infarction and had undergone angioplasty before the policy issuance, the complaint was liable to be dismissed.
After hearing both parties, NCDRC observed that the main issue in this case is whether Ms Singh is entitled to claim against the death of Mr Singh who died in an accident.
The bench noted that the final report, which included the post-mortem report dated 17 August 2015, mentioned the cause of death as being due to shock and haemorrhage caused by serious head injury. "No other cause of death was mentioned in the investigator report."
"It is also an admitted position that the insured was suffering certain ailments and had not disclosed these material facts at the time of taking the insurance policies. The DLI did not disclose the medical conditions while filling the proposal and obtained the policies. The HDFC Standard Life Insurance asserted that the contract for life insurance is based on utmost good faith and the insured was bound to clearly bring out all prescribed details, including his medical condition. On the other hand, the counsel for Ms Singh argued that the cause of the insured's death in an accident was not related to a pre-existing illness and he died due to a heart attack," the bench noted.
Referring to the legal maxim 'uberrimae fidei', i.e., utmost good faith in an insurance contract, AVM Rajendra noted that the insured has a duty to the insurer to disclose all material facts and vice-versa, the insurer must also inform the insured about the terms and conditions of the policy that is going to be issued to him and must conform to the statements in the proposal form or prospectus, or those representations made through his agents.
"Thus, the principle of utmost good faith imposes meaningful reciprocal duties owed by the parties towards each other. At the same time, it is undisputed that the complainant had not disclosed about he was suffering from certain medical conditions. It is also a matter of record that, notwithstanding the dispute about the pre-existing medical conditions, the death of the life insured had occurred on 16 August 2015 due to a head injury suffered by him in a road accident, which is independent of the stated medical conditions," he added.
While allowing the appeal and setting aside the order passed by the state commission, NCDRC directed HDFC Standard Life Insurance to pay the sum insured under the insurance policy in question to Ms Singh along with interest of 9%pa from the date of filing of the complaint and Rs25,000 litigation costs.
(First Appeal No714 of 2022 Date: 7 November 2024)
