A district consumer commission in Nagpur has directed Edelweiss Tokio Life Insurance Company Limited to pay ₹50 lakh to a widow whose husband's insurance claim was wrongfully rejected. As per the commission's order dated last month, the insurer was found guilty of deficiency in service for rejecting the legally payable insurance claim of the complainant's husband. The commission directed the firm to pay the claim amount along with 9% annual interest calculated from September 30, 2023, along with ₹10,000 as compensation for physical and mental harassment and an additional ₹10,000 towards litigation costs. The ruling establishes that insurers cannot reject claims merely because pre-existing conditions were not explicitly mentioned in policy applications.
According to the complainant's allegations, her husband had purchased the insurance policy in April 2021 and subsequently died on January 26, 2023. Following his death, the widow filed an insurance claim, but the insurance firm subsequently rejected the claim, cancelled the policy, and sent a premium refund cheque of ₹18,713 in September 2023. During the proceedings, the commission noted that the insurance company contended that the deceased had concealed his history of chronic alcoholism, hypertension, and diabetes mellitus, claiming this violated the principle of utmost good faith. However, the commission pointed out that the medical examination form submitted on May 20, 2021, before policy issuance, clearly stated the insured consumed 'whisky of 90 ml twice in a month since 15 years'.
The commission relied on Supreme Court orders that termed hypertension and diabetes mellitus as lifestyle diseases, noting that claims cannot be denied merely because a person did not mention these pre-existing diseases before taking the policy. The commission established that even though it was clearly mentioned before taking the policy that the complainant's husband consumes alcohol/whisky, the opposite party caused deficiency in service by rejecting the legally payable insurance claim. The ruling demonstrates that insurers remain liable for deficiency in service when they reject claims based on pre-existing conditions that were disclosed during the application process.
The commission's ruling reinforces the importance of consumer protection in insurance transactions, particularly regarding the disclosure of pre-existing medical conditions. Consumers facing similar grievances may contact the consumer helpline in their respective states (West Bengal: 033–2252–0448) or dial the National Consumer Helpline at 1915 for assistance. The case demonstrates that even when claims are eventually processed, insurers remain liable for the mental distress caused by delayed resolution of consumer complaints and inadequate customer service response, particularly when the rejection is based on disclosed conditions.
