The State Consumer Disputes Redressal Commission, Bihar, presided over by Justice Sanjay Kumar alongside Shamim Akhtar and Ram Prawesh Das, has affirmed an earlier ruling against TATA AIG Life Insurance Company by the District Commission, Vaishali. The insurance provider was found at fault for unjustly denying a legitimate claim from the plaintiff due to a pre-existing condition that wasn’t disclosed in the application form. The Commission stressed that unless the undisclosed pre-existing ailment was the direct cause of death, it shouldn’t disqualify the claimant from receiving the agreed-upon payout.
To give you a rundown of the situation, the plaintiff’s father, Mr. Surya Narayan Shah, bought two life insurance policies from TATA AIG Life Insurance, with coverage amounts of Rs. 10,00,000/- and Rs. 75,000/- respectively. He made Mr. Awadhesh Kumar Nirala, his son, the nominee. After an extensive medical check-up by a team of doctors appointed by the insurance company, the policies were issued. Tragically, Mr. Shah suffered a severe cold attack and, despite treatment from a local doctor, passed away.
After his father’s death, Mr. Nirala claimed the insurance money by providing all necessary documentation. However, his claim was denied by the insurance company, attributing the denial to a non-disclosed pre-existing condition of chronic asthma. Disgruntled, Mr. Nirala took his case to the District Consumer Disputes Redressal Commission, Vaishali.
The District Commission examined the health records and confirmed that Mr. Shah’s death was indeed due to the severe cold and not any undisclosed pre-existing condition. As a result, they ordered TATA AIG to pay Mr. Nirala Rs. 10,75,000/-. Unhappy with the decision, the insurance company appealed to the State Consumer Disputes Redressal Commission, Bihar.
During the hearing, the State Commission cited the precedent set in Life Insurance Corporation of India vs Sunita and Ors. where it was ruled that non-disclosure of a pre-existing condition would not disqualify a claim unless it was the direct cause of death. The State Commission noted that, although Mr. Shah didn’t disclose his chronic asthma, his death from a severe cold was not directly linked to this undisclosed condition.
In conclusion, the State Commission backed the District Commission’s decision, stating that it was well reasoned. They found the evaluation of evidence to be correct and maintained the earlier order as just and fair. However, the interest rate was decreased to 8% per annum from the original 15%, to be calculated from the date of the initial complaint until its payment.
To sum it up, this judgement reiterates the importance of understanding the terms and conditions of your insurance policy. However, it also provides a sense of relief that an undisclosed pre-existing condition will not nullify your claim unless it is the direct cause of death.
