State Consumer Disputes Redressal Commission
Life Insurance Corp. Of India vs Arti Soni on 30 November, 2006
IN THE STATE COMMISSION : DELHI IN THE STATE COMMISSION : DELHI (Constituted under Section 9 clause (b) of the Consumer Protection Act, 1986 ) Date of Decision : 30.11.2006 Appeal No.A-931/2006 (Arising from impugned order dated 21.03.2001 passed by District Forum(North), Tis Hazari, Delhi in complaint Case No.60/2004) Life Insurance Corpn of India Appellant Shakti Nagar Branch, Delhi through Ms. Jaya advocate Versus Mrs. Arti Soni Respondent. M-52-B, Malviya Nagar, New Delhi CORAM: Mr. Justice J.D.Kapoor President Ms. Rumnita Mittal Member
1. Whether reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Justice J.D.Kapoor (Oral)
1. Vide impugned order dated 30.06.2006, the appellant life Insurance Corporation of India has been directed to settle the claim of the respondent in respect of Insurance Policy No.11350146 for Rs.5,00,000/- and 113092085 for Rs.1,20,000/- and to pay the insured amount alongwith all other benefits of the policies and also awarded Rs.25,000/- towards mental agony and harassment suffered by the respondent and Rs.5,000/- towards cost of litigation. Feeling aggrieved, the appellant has preferred this appeal u/s 15 of the Consumer Protection Act, 1986.
2. Relevant facts for our purpose in brief are that the husband of the respondent Shri Rajeev Soni had taken two insurance polices for his life with the appellant. For both the policies he has given the name of his mother Smt. R.R.Soni as the nominee. He got married to the complainant on 21.11.2001 and obtained a third insurance policy with the appellant for his life on 28.12.2001 and nominated his wife Mrs. Arti Soni, the nominee for this policy. He had also completed all the formalities for earlier two policies to change the name of nomiee i.e. from his mother to his wife. Mr.Rajiv Soni expired on17.6.2002. The respondent Mrs. Arti Soni approached the appellant to claim the amount of the three insured policies. The appellant settled the claim for first policy for Rs.1,00,000/- on21.09.2002 and repudiated the death claim of the respondent on policies No.11350146 for Rs.5 lacs and 113092085 for Rs.1,20,000/- without mentioning any valid reasons for repudiation. Appellant has taken the stand for repudiating the claim that the insured was suffering from G-6 deficiency and the insured had deliberately not disclosed this information to the appellant. Appellant produced medical record of the hospital and leave record with the employer (Can Fin Homes Ltd.).
3. As is apparent from the aforesaid facts the only premise on which the claim of the respondent was repudiated was that the respondent concealed the factum of illness that he was suffering from Glucose-6 Phosphate Dehydrogenate deficiency right from birth. Interestingly one of the three polices obtained by him was honoured presumably on the ground that it has already been run for 7 years.
4. After investigation the appellant came to know that he was suffering from the aforesaid disease and obtained the policies. The medical leave record from the employer showed that he used to take leave on medical ground and it showed that he has availed 48 days leave during 1998-2001 and 11 days leave from 22.1.2001 till 01.02.2001 because of asthma.
5. Let us assume that the aforesaid medical record is correct and also the deceased was suffering from the aforesaid diseases, still the appellant was not justified in repudiating the claim. We have taken a view in large number of cases that until and unless a person is hospitalized or operated upon for such disease in the near proximity of the date of proposal of insurance then he is disentitled for any claim. In the instant case, one of the policies was honoured after 7 years as the policy was against life. Merely because the respondent was suffering from disease from birth did not disentitle him to get the claim of the life against life insurance policy because at the time of receiving premium and giving policy, the doctors on the panel of Insurance companies always examines the person and gives report as to the state of his/her health. Had the person referred above been seriously suffering from birth, there was no problem for the doctors of OPs panel to give a report of this disease and therefore, the insured should not be issued a policy. So far as the circumstances of taking medical leave is concerned it does not establish that he was in fact ill. Employees often take leave on medical grounds off and on to consume leave-mere taking medical leave is not a ground to presume that insured was suffering from disease. As per practice and as per insurance conditions, at the time of proposal for insurance the doctor gives its report to the insurer. During this period, the respondent has availed only 38 days leave whereas in the subsequent period only 11 days of leave have been availed. It is not clear from the leave record that he had availed leave for such disease and such nature of leave does not disentitle him to get the benefits of insurance policies.
6. In our view the consumer is not entitled to any claim if he conceals the factum of his hospitalization for a particular disease or having undergone operation for such disease in the near proximity of the date of proposal of insurance. It is only in respect of non-disclosure of such an event that he or she can be accused of having breached a faith while furnishing information in the proposal form. Further diseases which are common malaise of the modern life and are controllable on day to day basis and need only medication and neither hospitalization nor operation are not such diseases which should be disclosed in the proposal form for insurance claim as the consumer attends to normal and daily chores like any other healthy person nor such diseases fall within the nomenclature of pre-existing disease. We have come across cases where the claims of the consumers were denied for not having disclosed the minor physical problem being faced for 20 long years without affecting normal day to day life without even undergoing any operation or hospitalization.
7. The diseases which are being used by the Insurance Companies for repudiation of the claim are such which can be easily detected on examining the consumer at first instance or subjecting the consumer to some basic tests of blood sugar, ECG etc. For their own act of omission and commission, the Insurance Companies are taking undue advantage. For their negligence in performing their obligations they cannot be allowed to take undue advantage to the detriment of the interests of the consumer. Such an approach creates doubt as to their intention.
8. Experience shows that Insurance companies lay trap for the poor and gullible consumers to sell their product and once they are in their net they start wriggling out from their obligation. This is not the way to become rich by taking huge premium against medi-claim policies of thousands of consumers and when one or two of them files a claim they start taking one excuse or the other and find out the ways to defeat the rightful claim of the insured by picking a stray reference from the discharge summary.
This is not a consumer friendly practice and does not augur well even for the interest of the Insurance Companies.
Half of the population suffers from such malaises and the other half is on medication in one form or the other.
If Insurance Companies start denying policies on medical tests of the consumers they will be out of business sooner or later.
9. If the consumers at large get such an impression of the Insurance Company, the Insurance Company will loose its customer in these competitive times. It appears that because of such an approach of monolithic public sector Insurance Companies that this sector was opened to private and international players.
10. In the instant case the respondent had never been hospitalized nor operated upon for so called pre-existing disease for which no medical term was provided. She was operated upon for the first time subsequent to the medi-claim policy and was just having complaint of pain in left hip and was using stick for walking and when it aggravated she was hospitalized and operated upon. Had there been any malafide attempt on the part of the respondent to conceal the factum of pre-existing disease it would have been projected in the discharge summary wherein the respondent gave actual facts to the treating doctor. Can such a person be accused of concealing the fact that she was suffering from a particular disease, the medical terminology of which even educated person does not know. Certainly not. Nor can such a disease or complaint as referred in the Discharge Summary be used as a pre-existing disease for invoking exclusion clause.
11. Let us deal as to the import, concept and scope of exclusion clause or plea of concealment of a fact by the consumer as to a pre-existing disease. To get teeth more deeply into reality we have to first know as to what is the meaning of word disease. Dictionary meaning of disease is illness, a serious derangement of health or malady, a bodily disorder. Ordinarily disease or malady refers to a deep-seated chronic disease, frequently one that is ultimately fatal whereas any other ailment or even chronic disorder like diabetes, hypertension, pain in limbs or body or even arthritis that are controllable by day-today medication are generally present in the people in their middle age say above forty or fifty. This is internationally accepted dogma of health as ordinarily even medical insurance of people below forty does not require any blood test or test for hypertension or ECG or any other test for heart ailment.
12. As is apparent, any malady, which is controllable with medication and does not involve such a treatment that needs hospitalization for days together or needs operation to cure it is not a disease for the purpose of mediclaim policy. If medication of any such malaise can keep the men fit for doing daily chores and ordeals such a malaise can by no stretch of imagination be termed as a disease much less the pre-existing disease.
11. Thus malaises of diabetes, hypertension, occasional pain in the body or organs, fever at times, ischemia, anginal pain are not such diseases non-disclosure of which may be used for repudiating the claim against mediclaim policy. These are normal wear and tear of human life. Unless a person is hospitalized for the treatment or operated upon, he cannot be held to be suffering from a pre-existing disease as he undertakes day to day activities and attends to daily chores and duties.
13. Why does a person obtain mediclaim policy? He obtains it to meet the medical expenses incurred by him for hospitalization or operation for specific disease. Fact that insured cannot be reimbursed the daily expenses incurred by him for medicines being taken by him regularly or on day-to-day basis shows that claim against such a policy is permissible only if an insured is hospitalized or operated upon for curing the specific disease. Thus non-disclosure of above-referred maladies is insignificant. These are not such diseases that fall within the exclusion clause for the purpose of mediclaim policy.
14. It is common knowledge that half of the population suffers from these maladies. Other half does not have a perfect health to the mathematical precision. Had it been so lacs of people wont be thronging to the Yoga Camps or such like congregations for being taught about healthful hints.
15. It is in the interest of these companies not to repudiate the claims on flimsy grounds particularly invoking exclusion clauses or concealment of such diseases as in that case they would be left with no business. They wont be left with any customer who shall be eligible to obtain these policies as every one of them if subjected to a medical examination would be found having one problem or the other. Let these Insurance Companies make a medical tests a condition precedent for issuing mediclaim policy and not rely upon the information provided by the consumer and see how many customers they get. Out of 10, nine would be suffering from such maladies.
16. Now we advert to the meaning of word pre-existing. As the word pre-existing suggests, a disease should not only be existing at the time of taking of policy but also should have been existing and continuing to exist prior to the date of policy. We have come across many cases where the claims of insured were repudiated on the ground that the insured had not disclosed that he was operated or hospitalized for a particular disease ten to fifteen or five years ago. Can non-disclosure of such a fact be treated as concealment of pre-existing disease? Certainly not. Why? Because the person was cured of the said disease and had been leading a normal life for ten years and to tell him after six months of taking the policy that he did not disclose that he was operated upon or he was hospitalized for a disease that existed 10 years before and therefore it was a concealment of fact about pre-existing disease. Such an approach or interpretation is nothing short of logic-chopping as for 10 years and particularly at the time of taking the policy or in its near proximity, the disease did not exist.
17. Non-disclosure of a factum of having been hospitalized or operated upon for the treatment or cure of a specific disease in the near proximity say six months or a year prior to taking the policy may be used for repudiating the claim for the reason of non-disclosure of pre-existing disease as in that event, element of malafide of the insured cannot be ruled out.
18. It is astonishing that in most of the cases the panel doctors of the Insurance Companies pick up a stray reference in the discharge summary of the insured giving the past history and use it as a guise to repudiate the rightful claim of the insured. For instance, if patient or his relative, at the time of admission, gave the history that he or she was having diabetes or hypertension or occasional pain in the chest for the past few years, these companies use it as non-disclosure of pre-existing disease and also invoke exclusion clause inspite of the fact that the insured has been otherwise leading a normal healthy life and attending to his duties, daily chores and had never been hospitalized or operated upon for the said problem or malady.
19. Such a propensity and tendency on the part of the Insurance Companies needs to be curbed with heavy hand as invariably every mediclaim is being repudiated on these excuses. On the one hand they do not subject the insured to basic tests to rule out these maladies as they want to augment their business by charging the premium while on the other hand when out of ten one or two consumers file a claim, they start finding out one excuse or the other, most of which are dubious and feeble to defeat the rightful claim of the party.
This is highly unethical and uncouth practice.
20. To sum up our conclusions are as under:-
(i) Disease means a serious derangement of health or chronic deep-seated disease frequently one that is ultimately fatal for which an insured must have been hospitalized or operated upon in the near proximity of obtaining the mediclaim policy.
(ii) Such a disease should not only be existing at the time of taking the policy but also should have existed in the near proximity.
If the insured had been hospitalized or operated upon for the said disease in the near past, say, six months or a year he is supposed to disclose the said fact to rule out the failure of his claim on the ground of concealment of information as to pre-existing disease.
(iii) Malaise of hypertension, diabetes, occasional pain, cold, headache, arthritis and the like in the body are normal wear and tear of modern day life which is full of tension at the place of work, in and out of the house and are controllable on day to day basis by standard medication and cannot be used as concealment of pre-existing disease for repudiation of the insurance claim unless an insured in the near proximity of taking of the policy is hospitalized or operated upon for the treatment of these diseases or any other disease.
(iv) If insured had been even otherwise living normal and healthy life and attending to his duties and daily chores like any other person and is not declared as a diseased person as referred above he cannot be held guilty for concealment of any disease, the medical terminology of which is even not known to an educated person unless he is hospitalized and operated upon for a particular disease in the near proximity of date of insurance policy say few days or months.
(v) Disease that can be easily detected by subjecting the insured to basic tests like blood test, ECG etc. the insured is not supposed to disclose such disease because of otherwise leading a normal and healthy life and cannot be branded as diseased person.
(vi) Insurance Company cannot take advantage of its act of omission and commission as it is under obligation to ensure before issuing medi-claim policy whether a person is fit to be insured or not. It appears that insurance Companies dont discharge this obligation as half of the population is suffering from such malaises and they would be left with no or very little business.
Thus any attempt on the part of the insurer to repudiate the claim for such non-disclosure is not permissible, nor is exclusion clause invokable.
(vii) Claim of any insured should not be and cannot be repudiated by taking a clue or remote reference to any so-called disease from the discharge summary of the insured by invoking the exclusion clause or non-disclosure of pre-existing disease unless the insured had concealed his hospitalization or operation for the said disease undertaken in the reasonable near proximity as referred above.
(viii) Day to day history or history of several years of some or the other physical problem one may face occasionally without having landed for hospitalization or operation for the disease cannot be used for repudiating the claim. For instance an insured had suffered from a particular disease for which he was hospitalised or operated upon 5, 10 to 20 years ago and since then had been living healthy and normal life cannot be accused of concealment of pre-existing disease while taking mediclaim policy as after being cured of the disease, he does not suffer from any disease much less the pre-existing disease.
(ix) For instance, to say that insured has concealed the fact that he was having pain in the chest off and on for years but has never been diagnosed or operated upon for heart disease but suddenly lands up in the hospital for the said purpose and therefore is disentitled for claim bares dubious design of the insurer to defeat the rightful claim of the insured on flimsy ground. Instances are not rare where people suffer a massive attack without having even been hospitalised or operated upon at any age say for 20 years or so.
(x) Non-disclosure of hospitalization/or operation for disease that too in the reasonable proximity of the date of mediclaim policy is the only ground on which insured claim can be repudiated and on no other ground.
21. The foregoing reasons persuade us to dismiss the appeal, which is misconceived and misdirected.
22. We advise the medical doctors on panel of the Insurance Companies to first equip themselves with the basic knowledge to know the meaning of word disease before giving their opinion instead of toeing the line of their masters to remain on the panel or the medical terminology of disease for the purpose of accusing a layman to know such a word which is difficult to pronounce as mentioned in the discharge summary as such a man will come to know about such a disease when he is hospitalised or operated upon and not if he has been otherwise living normal and healthy life.
23. Bank Guarantee/FDR, if any, deposited by the appellant be returned to the appellant forthwith under proper receipt.
24. A copy of this order, as per the statutory requirements be forwarded to the parties, free of charge and also to the concerned District Forum and thereafter the file be consigned to the Record Room.
(Justice J.D.Kapoor) President (Rumnita Mittal) Member slc