Ghaziabad: The district consumer disputes redressal commission has has ordered LIC of India to pay Rs 10 lakh to the nominee of a policyholder within 30 days. The amount includes Rs 9.9 lakh towards the death claim and Rs 5,000 as compensation for causing mental agony and also to cover litigation costs.A complaint in the matter was filed by Ghaziabad resident Nelam Marwah on Jan 3, 2017, informing commission president Anil Kumar Pundir and members Shailja Sachan and RP Singh that her husband Pavneesh Marwah had purchased a policy from the insurer with a sum assured value of Rs 9.95 lakh on Nov 27, 2013. On Dec 5, 2014, he fell ill and subsequently died in hospital.However, LIC refused to settle the claim. It informed Nelam in a letter that the claim had been rejected because her husband had concealed existing health complications at the time of getting the policy.LIC’s counsel said upon receiving the plaintiff’s claim, the insurance company investigated the papers and rejected the claim in accordance with the terms and conditions of the insurance policy, and a notice of the rejection was sent on March 30, 2016. Dissatisfied with the rejection, an appeal was sent to the insurance company’s regional office in Kanpur, but it was again rejected on July 30, 2016.Describing the allegation of not disclosing existing health conditions as baseless, the plaintiff sought relief from the commission.Having heard arguments of both the parties and after perusing the documents on record, the commission said that an insurance contract is a contract of utmost good faith, but the insurance company cannot arbitrarily reject a claim based solely on this principle.“When an insurance company alleges that the insured concealed material health facts, the burden is on it to prove that the alleged illness actually existed and was material and risk-affecting at the time of obtaining the policy. It also has to prove the insured was aware of the illness, the insured deliberately and fraudulently concealed these facts, and that the alleged illness had a material and relevant connection to the insured’s death or the insurance risk,” the commission said, adding that LIC has failed to establish these facts based on the documents presented.
