Alcohol disclosure saves Rs 50 lakh insurance claim

A Nagpur consumer commission has directed Edelweiss Tokio Life Insurance Company Ltd to pay Rs 50 lakh to a widow after ruling that the insurer wrongly rejected her late husband's life insurance claim despite his having disclosed his alcohol consumption before the policy was issued.

The District Consumer Disputes Redressal Commission, Nagpur, also directed the insurer to pay 9 per cent annual interest on the claim amount from September 30, 2023, along with Rs 10,000 for physical and mental harassment and Rs 10,000 towards litigation costs.

The woman's husband had purchased the policy in April 2021 and died suddenly on January 26, 2023. The insurer rejected her claim, cancelled the policy and refunded Rs 18,713 in premiums.

The company argued that the deceased had concealed chronic alcoholism, hypertension and diabetes, violating the principle of utmost good faith. The commission, however, noted that his May 20, 2021 medical examination form explicitly recorded that he consumed 90 ml of whisky twice a month and had done so for 15 years.

It also noted that the insurer's panel doctor had not recorded hypertension or diabetes during the pre-policy medical examination. Citing Supreme Court rulings treating hypertension and diabetes as lifestyle diseases, the commission held that the claim could not be rejected merely on the ground that these conditions were not disclosed.