Your Insurance Claim Can Be Rejected If You Hide Alcohol Use. Here’s What The Supreme Court Said – News18
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The Supreme Court ruled that hiding alcohol consumption details can lead to insurance claim rejections. LIC denied a claim due to non-disclosure of alcoholism, and the court upheld this.
The Supreme Court upheld LIC’s decision to deny a claim on the basis of material misrepresentation.
A recent Supreme Court ruling reinforced the importance of full disclosure when purchasing insurance, highlighting how hiding details about alcohol consumption can lead to claim rejections, even if the cause of death is unrelated to drinking. The case in question involved a man who purchased the Jeevan Arogya policy from the Life Insurance Corporation of India (LIC) in 2013. While filling out his application, he did not disclose that he had been consuming alcohol heavily for years. Less than a year after purchasing the policy, he was hospitalised in Jhajjar, Haryana, due to severe stomach pain. After a month of treatment, he suffered a fatal heart attack.
Following his death, his wife filed a claim for medical expenses under the policy. However, LIC rejected it, citing the deceased’s failure to disclose his alcoholism. The insurer argued that their policy explicitly excludes coverage for “self-inflicted diseases” and “complications caused by excessive alcohol consumption”. Since the man had falsely declared that he did not drink, LIC deemed the claim invalid.
Initially, the district consumer forum ruled in favour of the widow, ordering LIC to pay Rs 5.21 lakh. The state and national consumer commissions upheld this decision, reasoning that the man’s death resulted from a heart attack rather than a liver-related condition. However, LIC remained firm in its stance and escalated the matter to the Supreme Court.
In its verdict, the Supreme Court overturned the consumer forums’ rulings, siding with LIC. Justices Vikram Nath and Sandeep Mehta emphasised that this was not a standard insurance policy but a specialised health insurance plan with stringent terms.
The court noted that the deceased had suffered from “long-term drinking”, a condition that could not have developed overnight. His failure to disclose this fact at the time of purchasing the policy was sufficient grounds for rejecting the claim. “Alcohol does not cause liver disease overnight,” the court observed, highlighting that the deceased’s alcoholism had likely been an issue long before he bought the policy.
The court upheld LIC’s decision to deny the claim on the basis of material misrepresentation. However, given the widow’s financial condition, the Supreme Court chose not to order her to return the Rs 3 lakh she had already received from LIC.
