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Prakash Sadhwani vs Life Insurance Corporation of India

Case: On the death of his son Prakash Sadhwani lodged claim documents for Rs. 5 Lakhs. LIC rejected the claim on the basis that insured was having pre-existing disease at the time of buying the policy. Prakash Sadhwani took up the case in Delhi District Consumer Forum.

Judgment: Dec. 2012 – The District Consumer Forum decided that LIC should pay the following.

Claim Amount : Rs. 5,00,000
Award for deficiency & harassment   Rs. 1,00,000
Litigation Expenses : Rs. 50,000
Total : Rs. 6,50,000

While awarding the Judgement the bench noted: “The bench noted that the evidence given by Sadhwani showed that it was on February 2, 2007, that his son was detected with a cardiomyopathy and there was no history of any disease prior to 2D echo cardiography”. Hence LIC should pay Rs. 6.50 Lakhs (Claim+ Award for deficiency & harassment+ Litigation Expenses)

Implication: It is one of the many cases which are going to Consumer Forum. General tendency of Life Insurance Companies is to deny claim lodged within 3 years of issue of insurance policy.

Term Insurance India welcomes this Judgment.