Can insurance claim be denied on presumption of pre-existing disease? No says NCDR

New Delhi, June 07: The NCDR has held that an insurance claim cannot be denied on mere presumption that a person might be suffering from a pre-existing disease.

The National Consumer Disputes Redressal Commission (NCDRC) said even if the insured person was suffering from a disease and did not know about it nor was taking any treatment for the same, the claim cannot be denied by an insurance company.

The observations by the commission came while rejecting the revision plea filed by Reliance Life Insurance Co. Ltd against the Maharashtra state commission's order dismissing its appeal challenging a district forum's direction to pay Rs 1,12,500 to the husband of one of its policy holders who died of diabetic ketoacidosis.

The district forum had also awarded Rs 5,000 towards physical and mental trauma, and Rs 3,000 as litigation cost to the husband who had filed the complaint against the insurance company.

The NCDRC, while dismissing the revision plea, said the onus to prove the pre-existing disease lies on the insurance company.

The commission also said in its view, diabetes was a lifestyle disease in India and the whole insurance claim cannot be rejected only based on this ground.

Rekha Halder died of diabetic ketoacidosis on June 24, 2011.

She was insured under a policy plan of Reliance Life Insurance Co Ltd since July 12, 2010. However, the insurance company repudiated the claim on the ground of non-disclosure of material information.

On the complaint of Halder's husband, the district forum of Jalgaon, Maharahstra, had passed an order directing the company to pay him over Rs 1.12 lakh.