Ahmedabad: A consumer court has ordered an insurance company to pay life insurance claim of Rs 18.20 lakh with 9% interest to a widow because the claim was refused after the insured person was found HIV+ when he died nine years ago.
According to the case details, Bajaj Allianz Life Insurance Co Ltd issued a life insurance policy of Rs 18.20 lakh to a 47-year-old man in Dahod in October 2008 on payment of annual premium of Rs 26,000. The man died on August 21, 2009 and the hospital found that he was HIV+. After his death, his widow claimed the policy that he had obtained barely a year before his death.
An investigation on part of the insurer revealed that the person was a chronic alcoholic and a chain smoker and was keeping bad company. He was a labourer but obtained the policy by posing himself as a labour contractor with annual income of Rs 3 lakh. In fact, his income was just Rs 36,000 and his family used to fall under Below Poverty Line category.
In July 2010, the insurance company repudiated the widow’s claim to insurance saying that the deceased had suppressed information about his occupation, income and health while obtaining the policy. The widow approached the Gujarat State Consumer Dispute Redressal Commission seeking insurance from the company and compensation for its deficiency in service for illegally rejecting the claim.
The insurance company reiterated its stand before the court. “The deceased life insured was suffering from this problem since long but he did not disclose it while obtaining life insurance policy,” the company told the court.
The consumer court did not accept the company’s argument and said that it had accepted the policy proposal form after due verification. On the insured’s financial status, the court cited the national commission saying, “Life insurance policy is taken to cover the risk to life which is equally dear and costly to every person, whether rich or poor, after having got the financial standings and income checked and verified by IRDA licensed advisor and authorized signatory, repudiation of the claim is not justified.”
The court ordered the insurer to pay claim with 9% interest since 2010 along with Rs 15,000 extra towards compensation for mental torture and legal expenditure.