The High Court accepted the wife's claim for insurance payment after the man's death.

Why in the News ?

• In a significant decision, the Punjab and Haryana High Court recently upheld a Permanent Lok Adalat order directing the payment of ₹14.22 lakh to the wife of a deceased man who died just 25 days after purchasing the life insurance policy.
• While hearing the case, Justice Jagmohan Bansal stated that the insurance company failed to prove the allegation that the deceased had concealed information about his cancer.

What was the case ?

• According to the case, Samundar Singh had purchased a life insurance policy from Bharti AXA Life Insurance on March 23, 2018, with a sum assured of ₹7.11 lakh, a death benefit of ₹14.22 lakh, and a first premium of ₹63,172.
• After taking out the policy, he died of a heart attack on April 25, 2018, 25 days after the policy was issued.

Why did the insurance company reject the claim ?

• The insurance company rejected the claim on March 31, 2019, stating that the deceased was already suffering from a cancer called Squamous Cell Carcinoma.
• According to the company, the deceased had been undergoing treatment for this disease since February 2017, but did not disclose this information when purchasing the life insurance policy.
• The insurance company rejected the claim, citing it as a case of concealment of material facts related to a pre-existing disease.

High Court Comments

• The High Court noted that the insurance company had challenged the Permanent Lok Adalat order on the grounds of concealment of facts, but could not substantiate its allegations with credible evidence.
• The court also clarified that the insurance company failed to establish a link between the alleged cancer and the actual cause of death of the deceased.
• According to the records, the deceased died of a heart attack, not cancer.
• The court stated in its decision that the Permanent Lok Adalat clearly found that the insurer could not prove that the insured person was suffering from cancer, and therefore, there was no basis for interfering with its order.

What is the impact of concealing information in an insurance policy ?

• When purchasing life insurance, the applicant is required to provide accurate health information.
• If a person deliberately conceals important facts, the insurance company may reject the claim.
• However, in such cases, the responsibility to prove the concealment lies with the insurance company.

What message does the decision convey ?

• This decision strengthens the protection of policyholders' rights and clarifies that insurance companies cannot reject claims without sufficient evidence.
• This decision also underscores the importance of consumer protection and easy access to justice.

Conclusion

Finding no factual or legal error in the case, the Punjab and Haryana High Court dismissed the insurance company's petition and upheld the order awarding the wife an insurance payment of ₹14.22 lakh.