Just around six months before his death in 2009, Lalith Kumar Jain purchased nine life insurance policies through an LIC agent. All amounting to a sum insured of Rs 2 crore!
At the time of signing the proposal, Jain appeared in good health. But he died of heart attack just a few months after buying the policies.
Generally, death claim under life insurance becomes admissible if the insured dies after the commencement of the policy. Here Jain died a few months after he started paying premium for the policies. So his wife should have received the death claim.
But LIC denied the claim. Do you want to know why?
Well, following is the story of what actually happened. At the end, there is also an important insurance lesson for you.
Jain’s policies commenced between 20th April 2009 to 20th June 2009. And he died of a sudden heart attack on 19th October 2009. All of these policies were valid till 2027-2032.
In the proposal forms for all the policies, Jain didn’t share his medical history correctly.
For example, in response to a query on whether he was suffering from or had suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous System, Jain simply ticked “No”.
He also ticked “No” for the query asking whether he was into smoking, drinking (alcohol), consuming tobacco (in any form), drugs, narcotics.
Further, when he was taken to the LIC’s doctor for examination before the start of the policy, Jain hid his medical history.
Also Read: How A Tata Sumo Owner Got Motor Insurance Claim After Driver Disappeared With The Vehicle
How the facts came to light?
Many policy buyers think they can get away hiding some facts from insurers. But this doesn’t happen. Insurance companies do not pass any claim so easily.
In Jain’s case, the LIC hired a private investigator. It found that Jain was admitted to the ICU of a hospital for a heart-related ailment just two years before buying the policies. Moreover, Jain was a regular smoker for 15 years and a social drinker (3-4 times a month)! These facts were found from Jain’s past hospital records.
Based on findings of the investigator, the LIC denied the Death Claim to Jain’s wife. LIC’s case was so strong that it won, even in the NCDRC.
In the repudiation letter to Jain’s wife, LIC said the claim was declined on “account of the deceased having withheld correct information regarding his health at the time of effecting the assurance”
Insurance Lessons For You
When buying an insurance plan:
- Never hide your medical history when
- Never hide your smoking and drinking habit
As per various past court judgments, it is the duty of the insured to make correct disclosures.
Disclaimer: The above story is for informational purposes only, based on an NCDRC order dated 01 November 2023 in Sangeeta Jain vs LIC of India and 3 Ors.
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