Jacob Punnen and Ors.
vs.
United India Insurance Co. Ltd.
I(2022)CPJ87(SC)
Policy type- Medical Insurance Policy
The Supreme Court rejected the insurer’s argument that the consumer was under an obligation to inquire about the terms of the policy, and any changes that might have been introduced, in the standard terms. The state of the law as observed was that an insurer was under a duty to disclose any alteration in the terms of the contract of insurance, at the formation stage or as in this case, at the stage of renewal. The insurer cannot be heard to say that the insured was under an obligation to satisfy itself, if a new term had been introduced. In the facts of the case, the Court observed that medical or health insurance cover becomes crucial with advancing age; the policy holder is more likely to need cover; therefore, if there are freshly introduced limitations of liability, the insured may, if advised properly, and in a position to afford it, seek greater coverage, or seek a different kind of policy. Further, most policies – health and medical insurance policies being no exception, are in standard form. One who seeks coverage of a life policy/a personal risk, such as accident or health policy has little choice but to accept the offer of certain standard term contracts. Therefore, relying on the IRDA (Health Insurance) Regulations, 2016, the Court observed that it is the insurer’s obligation to inform every policy holder, about any important changes that would affect her or his choice of product.
