Case Title: Shabra Khatoon vs Bajaj Allianz Life Insurance Company Ltd. and Anr.
Summary
The State Commission, comprising Justice Sanjay Kumar and Mr. Ram Prawesh Das, found Bajaj Allianz Life Insurance Company liable for the wrongful repudiation of a valid life insurance claim. The decision was based on pre-existing diseases unrelated to the insured’s death. The deceased had acquired a life insurance policy from the Insurance Company, which was approved after a satisfactory medical examination. The policy was implemented on July 23, 2015, and the deceased died of a heart attack. The deceased’s wife, who submitted a claim for the death benefit, initially denied the claim due to the failure to disclose pre-existing medical conditions. The Insurance Company claimed that they discovered the deceased’s history of pre-existing conditions during the investigation, but the State Commission found that the company was responsible for demonstrating that the deceased was aware of these conditions and intentionally concealed them. The State Commission directed the Insurance Company to pay the Complainant Rs. 19,95,000/- with 8% interest.
About the case
‘Bajaj Allianz Life Insurance Company’ was found liable for the wrongful repudiation of a valid life insurance claim by the State Consumer Disputes Redressal Commission, Bihar bench, which was comprised of Justice Sanjay Kumar (president) and Mr. Ram Prawesh Das (member). The basis for the decision was pre-existing diseases that were unrelated to the insured’s death. The Insurance Company was instructed to disburse Rs. 19,95,000/- to the insured’s designate.The deceased had acquired a life insurance policy from Bajaj Allianz Life Insurance Company Ltd. (“Insurance Company”). The policy was for a sum assured of Rs. 7.98 Lakh and covered a mortality benefit of Rs. 19.95 Lakh. His health status was certified as satisfactory after a medical examination by the Insurance Company’s panel doctor, and he paid the first premium of Rs. 1,21,062/-. As a result, the Insurance Company approved the proposal, and the policy was implemented on July 23, 2015. Subsequently, the deceased succumbed to a heart attack at his residence. The Insurance Company was informed of the deceased’s demise by the deceased’s wife (“Complainant”), who subsequently submitted a claim for the death benefit. The Insurance Company initially submitted a claim notification; however, it later denied the claim, attributing the failure to disclose pre-existing medical conditions.Upon receiving the repudiation decision, the Complainant submitted an appeal to the Claim Review Committee. She lodged a consumer complaint with the State Consumer Disputes Redressal Commission, Bihar (“State Commission”) in response to the delay in the aforementioned review.
The Insurance Company responded by asserting that they discovered the deceased’s history of pre-existing conditions, such as diabetes, bilirubin, and hepatitis, during the investigation that followed the death claim. The Insurance Company’s investigator obtained medical records from Dr. Keshwar Prasad, which indicated that the deceased had been treated for these conditions earlier in 2015. The diagnosis of these diseases was also supported by pathological reports, which confirmed aberrant levels of blood sugar and bilirubin prior to the policy proposal. The State Commission’s observations include:
The State Commission noted that both parties concurred that the deceased had submitted a proposal form for a life insurance policy, which was accepted following a comprehensive medical examination conducted by the Insurance Company’s panel doctor. The panel doctor certified the deceased insured as being in excellent health, and the medical tests, including sugar levels, were found to be normal. The Complainant submitted a mortality claim after the deceased passed away as a result of a heart attack 22 days after the policy was initiated. The Insurance Company initiated an investigation due to the early nature of the claim, during which it claimed that the decedent had pre-existing conditions, including diabetes, jaundice, and hepatitis. The Insurance Company contended that this information was intentionally concealed.
Nevertheless, the State Commission determined that the Insurance Company was responsible for demonstrating that the deceased was aware of his pre-existing conditions and intentionally concealed them. The Insurance Company’s investigation was predicated on medical prescriptions and pathological reports; however, neither the investigator nor the physician who purportedly administered the deceased’s treatment submitted affidavits to confirm the authenticity of these documents. The State Commission also noted that the investigator did not provide credible sources or witnesses to verify the acquisition of the documents. Furthermore, there was no evidence that the deceased was hospitalized for the purported illnesses.
The State Commission also observed that the Insurance Company’s pathological tests indicated that the deceased’s health was normal. Consequently, the findings contradicted the assertion that he was afflicted with severe illnesses. Additionally, the deceased’s heart attack was not explicitly associated with the pre-existing conditions mentioned by the Insurance Company. Consequently, the State Commission determined that the rejection of a claim cannot be justified by the suppression of a disease that is unrelated to the cause of mortality.
The State Commission, in conclusion, directed the Insurance Company to pay the Complainant Rs. 19,95,000/- with 8% interest.
