New Delhi (Orissa Today ) Mar 26: The Supreme Court of India ruled in favor of Life Insurance Corporation (LIC) in a case related to a health insurance claim under the “Jeevan Arogya” policy. The policyholder, Mahipal, failed to disclose his chronic drinking habit while purchasing the policy in 2013. This concealment became the key reason behind the rejection of his health insurance claim.
Mahipal was hospitalized due to severe abdominal pain and later passed away after a month of treatment. His widow filed a claim for the hospital expenses. However, LIC denied the claim, citing the exclusion clause in the policy, which does not cover conditions resulting from alcohol use or abuse. LIC highlighted that Mahipal had hidden his drinking habit, a critical factor contributing to his health complications.
The Supreme Court upheld LIC’s decision, emphasizing that insurance contracts rely on “utmost good faith.” Policyholders are expected to disclose material facts, and withholding such information invalidates claims related to the concealed condition.
The court also reviewed Mahipal’s medical history, which confirmed long-term alcohol consumption leading to chronic liver disease. It noted that the cardiac arrest causing his death was linked to his pre-existing liver condition, which stemmed from alcohol addiction.
While the Supreme Court supported LIC’s rejection of the claim, it acknowledged the ₹3 lakh already paid by LIC to the claimant under consumer court directions and decided not to recover this amount. This ruling reinforces the importance of transparency in insurance agreements and serves as a precedent for future cases.
