Supreme Court states that the proposer is bound to reveal pre-existing ailments to the insurer
22 oct 2020
A bench of the Supreme Court comprising of Justices DY Chandrachud, Indu Malhotra, and Indira Banerjee has held that the judgment of the National Consumer Disputes Redressal Commission in a recent case is not following the law.
In the said case, an insurance company issued an insurance policy to a man who died one month after the issuance. He had filled an insurance proposal form declaring that he was in good health; however, an investigation revealed that the man was suffering from a stomach disease for which he was being treated at a hospital. This led to the cancellation of the insurance claimed by the insured's mother.
The NCDRC held that there was no relation between the cause of death and non-disclosure of disease. The bench has allowed the insurance company to repudiate the claim. However, considering that the claimant is 70 years old, the court has directed that the amount paid shall not be recovered under article 142 of the Constitution.