In a landmark ruling, the National Consumer Dispute Redressal Commission (NCDRC) has directed the Life Insurance Corporation (LIC) to honor nine insurance policies of a Nadiad resident, despite LIC’s claims of non-disclosure of depression-leading to a heart attack.
The decision sets a precedent, emphasizing that the lack of a clear link between depression and the cause of death should not be used as grounds for denying insurance claims.
Anil Patel from Nadiad had purchased nine LIC policies and tragically passed away due to a heart attack two years later. The family faced a denial of insurance claims, as LIC alleged that Patel concealed his struggle with depression when acquiring the policies. Undeterred, the grieving family contested the denial and took the matter to the Kheda district consumer forum, which ruled in their favor.
LIC, adhering to Insurance Regulatory and Development Authority guidelines, argued that the rejection of claims was justified due to Patel’s alleged non-disclosure of his depression.
The insurer emphasized the necessity for policyholders to declare their medical history and treatment during the policy acquisition. The case escalated to the National Consumer Commission after the Gujarat State Dispute Redressal Commission upheld the district forum’s decision in 2019.
Patel’s family countered LIC’s claims, asserting that impaneled doctors had conducted medical tests on Patel, for which he paid an extra premium due to his excess weight. The family argued that this negated any suggestion of information suppression.
They also maintained that depression had no bearing on the heart attack that led to Patel’s demise, a stance supported by both the state commission and the district forum.
NCDRC Ruling And LIC Insurance Amounts
The NCDRC, after careful consideration, stated that the medical literature provided by LIC did not establish depression as a serious ailment. Additionally, the commission observed that there was no documented evidence to indicate a link between depression and heart failure.
In a decisive statement, the NCDRC asserted, “There is no nexus between the ailment and the cause of death, i.e., heart failure,” directing LIC to fulfill the insurance amounts.
This ruling has far-reaching implications for the insurance sector, emphasizing the need for a concrete link between non-disclosed ailments and the cause of death. It establishes a precedent that depression, in itself, cannot be used as a blanket reason to deny insurance claims related to heart attacks.
The decision underscores the importance of thorough examination of medical evidence and challenges the practice of outright claim denials based on alleged non-disclosure.
The NCDRC’s ruling in favor of the policyholder against LIC signifies a victory for consumer rights and brings clarity to the interplay between mental health disclosures and insurance claims.
As families grapple with the loss of loved ones, this decision sets a standard that ensures insurance companies thoroughly evaluate medical evidence before denying claims.
It prompts a reevaluation of the criteria used by insurers to assess the relationship between pre-existing conditions and the cause of death, paving the way for fairer and more just insurance practices.
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