U.P. State Commission Holds LIC Liable For Wrongful Repudiating Of Claim Based On Deceased's Smoking Habits

The State Consumer Disputes Redressal Commission, Uttar Pradesh held LIC liable for wrongfully repudiating a valid claim based on the reason that the deceased failed to disclose the fact that he used to smoke cigarettes and bidis, at the inception of the policy. The State Commission held that LIC failed to prove the pre-existence of a lung disease. Further, it failed to prove that the deceased himself knew of any such disease at that time. Brief Facts: Pushpa Nigam's (“Complainant”) deceased husband held a life insurance policy with Life Insurance Corporation of India (“LIC”) for Rs. 60,000/-. The policy bond was issued on 14.07.2000 and 10.12.2001, the Complainant's husband passed away due to health issues. Being the nominee, the Complainant filed a claim with LIC. LIC repudiated the claim based on the reason that her husband failed to disclose that he used to smoke cigarettes and 'bidis' regularly. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Gonda, Uttar Pradesh (“District Commission”). The District Commission found substance in LIC's reason for repudiation of the claim and dismissed the complaint. Dissatisfied by the order of the District Commission, the Complainant filed an appeal in the State Consumer Disputes Redressal Commission, Uttar Pradesh (“State Commission”). Despite filing the appeal, no one appeared on behalf of the Complainant before the State Commission. Observations by the Commission: The State Commission perused the evidence presented by LIC. It held that all the treatment-related documents presented by the LIC were issued after the inception of the life insurance policy. Further, before the inception of the policy, there existed no evidence which showed the presence of any such health issues with the Complainant's husband. On the claim that the deceased was a regular smoker, the State Commission held that there was no evidence to suggest that the deceased failed to disclose any lung-related problems while availing of the policy. LIC failed to prove that the deceased himself knew of the disease at the time of availing of the policy. Consequently, the appeal was allowed, and the order of the District Commission was set aside. LIC was directed to disburse Rs. 60,000/- to the Complainant. Further, it was directed to pay Rs. 5,000/- to the Complainant for legal costs.

U.P. State Commission Holds LIC Liable For Wrongful Repudiating Of Claim Based On Deceased's Smoking Habits

Smita Singh

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