Death Claim - Gbic.co.in

The complaint was registered and necessary forms were issued to both the parties.Replies were received from both the parties.The Respondent vide its self-contained note received by this office on 18.10.2006replied that DLA having history as known case of Coronary Artery Disease – Old Anterolateral MI and had history of appendectomy in 1977 at the time of proposing forinsurance under the policy. However, DLA had not disclosed his illness in the proposalforms submitted for insurance and has stated his state of health was “GOOD”. Had thehistory of Coronary Artery Disease – Old Antero lateral MI been disclosed at the timeof proposing for insurance, decision for acceptance of the case would have beenaffected. Hence, the claim under the policy was repudiated due to non-disclosure ofmaterial facts.The policy in question was proposed on 08.02.2003 is after all these incidentswherever he did not mentioned any thing about his all these past illness. Consideringall these facts LIC repudiated the claim for the reason “Suppression of material facts”on 07.04.2006. Further the case was referred to the Claim Review Committee at LICZonal Office Bhopal. The ZO CRC in its meeting held on 26.07.2006 upheld the DOdecision of repudiation on 01-09-2006.Observations of Ombudsman : I have gone through the materials on records andsubmissions made during hearing and summaries my observations as follows:There is no dispute that the policy number 340361465 was issued to DLA by theRespondent on 11.02.2003 and death of DLA occurred on 18-09.2005 due to heartattack.During hearing, the complainant informed that the DLA was not suffering from anydisease and was in good health at the time of taking the policy in question. TheComplainant further stated that the DLA was an employee as Watchman of FoodCorporation of India, Indore and taken voluntary retirement before retirement date fromservice as his office was situated on third floor due to stone in kidney.The Complainant also added that the DLA was having total four policies bearing nos.341193139, 341196468, 341195974 and 342361465 and out of these four policies shehas received the death claim amount about Rs. 1.40 lacs under three policies exceptthis policy no 340361465.The Respondent contented during hearing that the DLA was having a history, as knowncase of Coronary Artery Disease – Old Antero lateral MI and had history ofappendectomy in 1977 at the time of proposing for insurance under the policy.However, DLA had not disclosed his illness in the proposal forms submitted forinsurance and has stated his state of health was “GOOD”. Had the history of CoronaryArtery Disease – Old Antero lateral MI been disclosed at the time of proposing forinsurance, decision for acceptance of the case would have been affected. Hence, theclaim under the policy was repudiated due to non-disclosure of material facts.It is observed from records that DLA was an employee of FCI and was posted asChokidar. It is also observed from the records of CHL-Apollo Hospital Indore dated 16-06-2005 shows that the DLA was a known case of Caronary Artery Disease – OldAntero lateral MI.It is also clear from the history sheet of Charak Hospital of Indore dated 18.07.2003that DLA was already suffering from Coronary Artery Disease – Old Antero lateral MIsince one year which appears the date prior to the date of proposal for insurance butintentionally suppressed in the Proposal forms under Policy in question.Insurance is a contract of Utmost Good Faith where both parties are required todisclose all the material facts. No party can be allowed to gain any undue advantage by