GUWAHATI: The Supreme Court recently ruled that insurers can reject health claims if a policyholder conceals their alcohol consumption habit at the time of purchasing the policy. The ruling came in favour of Life Insurance Corporation (LIC), which had repudiated a claim under the Jeevan Arogya scheme due to the policyholder’s non-disclosure of chronic alcoholism.
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A bench comprising Justice Vikram Nath and Justice Sandeep Mehta upheld LIC’s decision, overturning an earlier ruling by the National Consumer Disputes Redressal Commission (NCDRC), which had directed the insurer to pay ₹5,21,650 to the claimant.
The case involved Mahipal, who took LIC's Jeevan Arogya policy in 2013, providing daily hospital cash benefits. A year later, he was hospitalised with severe abdominal pain and died after a month of treatment. LIC rejected his widow’s claim, citing Jeevan Arogya's exclusion clause, which denies coverage for conditions arising from alcohol use.
The Consumer Forum had first ruled in favour of the claimant, but the Supreme Court disagreed, stating that the deceased had knowingly concealed his chronic alcoholism. The court examined medical records, which confirmed a history of alcohol intake. It noted that chronic liver disease, caused by long-term alcohol consumption, does not develop overnight, reinforcing LIC’s justification for denying the claim.
While the court upheld LIC’s rejection, it refrained from allowing LIC to recover ₹3,00,000 already paid to the claimant as per earlier directives, considering her financial condition.
