Kathmandu. The Supreme Court of India has recently given an important ruling on health insurance. The Supreme Court has given the right to the insurance company to reject the claim if a person does not inform about his alcohol addiction while taking out health insurance.
Commenting on this order, Alai Razavi, Managing Partner, Accord Juris, said, “This order is a warning to the insurance sector. Insurance contracts are based on the principle that applies to both the insurance company and the insured. If information about alcohol consumption is hidden and something happens because of it, the insurance company can reject the claim.”
This case concerns a person from Haryana. Who had purchased a ‘Jeevan Arogya’ insurance policy of the Life Insurance Corporation of India (LIC) in 2013. While filling the application form, he had not informed about his long-term alcohol consumption. Less than a year after purchasing the policy, the man had to be admitted to a hospital in Jhajjar, Haryana, due to unbearable stomach pain. After about a month of treatment, he died of a heart attack.
After the man’s death, his wife filed an insurance claim with the company for treatment expenses. However, LIC refused to pay the claim, saying that the deceased had not informed about his alcohol addiction.
The said policy of LIC clearly states that ‘self-inflicted illness’ and ‘complications caused by excessive alcohol consumption’ are not covered. The LIC declared the claim invalid because the person had given a false statement that he had not consumed alcohol.
According to Aslam Ahmed, partner at Singhania & Company, insurance companies usually check medical records to see if there is a history of alcohol-related illnesses. “They also look at whether alcohol played a role in the hospitalisation,” he said. “The terms of the insurance policy clearly state that alcohol-related illnesses are not covered. Therefore, treatment or death claims due to alcohol consumption are rejected.”
To avoid such problems, Delhi High Court advocate Shivam Chaudhary advised prospective applicants for health insurance to be transparent and provide all the necessary information clearly. “Whether it is medical history or lifestyle habits, it is good practice to provide complete information,” he said, “which proves to be in the best interest of the insured in case of any untoward incident.”
