Order Date: Not Mentioned
Order Name: Abdul Mannan Vs. Life India Corporation of India
Case No.: R.P. No. 1971/2015
The National Consumer Disputes Redressal Commission (NCDRC), led by AVM J. Rajendra, has ruled on the importance of full disclosure in insurance contracts. If crucial information is hidden, the insurer has the right to void the contract.
### Key Points of the Case
Abdul Mannan’s wife had taken out a ‘Jeevan Anand’ life insurance policy from the Life Insurance Corporation (LIC) with coverage of Rs. 5 Lakhs. She paid an annual premium of Rs. 41,930. Unfortunately, she passed away due to cardio-respiratory failure. When Abdul Mannan filed a claim, it was rejected. He appealed to the insurer’s Zonal Office, but no action was taken, prompting him to file a complaint.
Mannan argued that he had disclosed all necessary details, including his wife’s pre-existing condition of diabetes, which he believed the insurer should have considered when issuing the policy. He sought Rs. 5 Lakhs, Rs. 50,000 for mental agony and harassment, and Rs. 10,000 for litigation expenses. The District Forum partly ruled in his favor, ordering the insurer to pay Rs. 5 Lakhs along with Rs. 500 in litigation costs. Unsatisfied, Mannan appealed to the State Commission of Jharkhand, which dismissed his appeal. He then approached the National Commission.
### Insurer’s Argument
The insurer admitted issuing the policy and receiving the claim but argued that Mannan’s wife had hidden vital information about her diabetes and other health conditions. During an investigation, it was found that she had been treated for these conditions before taking out the policy. The insurer claimed that this non-disclosure was a material misrepresentation, justifying the rejection of the claim.
### National Commission’s Observations
The National Commission focused on whether the death claim was rightfully rejected. They emphasized that the non-disclosure of material facts at the time of policy issuance justified the repudiation. The Commission cited previous cases, such as Bajaj Allianz Life Insurance Company Ltd. v. Dalbir Kaur and Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod, which underline the importance of disclosure in insurance contracts. The Commission found that Mannan’s wife had failed to disclose her prior ailments and treatments, thus justifying the insurer’s decision to reject the claim. Consequently, the National Commission upheld the State Commission’s decision and dismissed the revision petition.
### Takeaway
This case highlights the critical importance of disclosing all relevant medical conditions when applying for insurance. Failure to do so can result in the cancellation of the policy and rejection of claims, even if premiums have been paid diligently. Always be truthful and thorough in your disclosures to avoid such issues.
