While taking an insurance policy, if you deliberately hide any important information, then it can become a big crisis for you or your family in future. One such case has come up from Haryana, in which his widow did not get a claim from Life Insurance Corporation (LIC) after the death of the insurance holder. The case reached the Supreme Court through the consumer court, but in the end the court also justified the LIC’s decision.
This is the whole matter
Mahipal Singh, a resident of Jhajjar, Haryana, took LIC’s life health plan on 28 March 2013. During the application, he described himself as completely drug addicts. According to the information given to LIC, he was away from any addiction like alcohol, smoking or tobacco. But within a year of taking the policy, Mahipal Singh’s health deteriorated. He died on 1 June 2014. It was told that he was admitted to the hospital due to severe abdominal pain and vomiting complaints. Long treatment went on and finally he died of cardiac arrest.
What was LIC’s argument behind the claim rejection?
After the death of Mahipal Singh, his wife Sunita Singh filed an insurance claim to make treatment and other expenses. But LIC dismissed the claim, saying that Mahipal Singh had a serious addiction of alcohol, which he hid while taking the policy. According to LIC, medical reports revealed that Mahipal used to consume excessive alcohol for a long time, causing serious damage to his liver and kidney. Due to the same problems, his health deteriorated and later he died.
Defeat even after a long legal battle
Sunita Singh approached the District Consumer Forum against the claim rejection. The court ordered LIC to give the claim amount ₹ 5,21,650, as well as compensation for interest and mental harassment. The LIC challenged the decision in the State and National Consumer Commission, but both the Commissions upheld the decision of the district court. Commissions admitted that Jeevan Arogya Yojana is a cash benefit policy, not reimbursement scheme, hence the claim should have been given.
Supreme Court verdict in favor of LIC
The LIC challenged the decision of the National Commission in the Supreme Court. The Supreme Court bench gave a decision in favor of LIC in the judgment given on March 2025. Justice Vikram Nath and Justice Sandeep Mehta gave this decision on three important points:
- The fact that was hidden became the cause of death. Mahipal Singh’s alcohol addiction was hidden, while he died due to the same reasons.
- It is mandatory to give information about habits like alcohol while taking insurance as it directly affects the risk evaluation of the insurance company.
- The Supreme Court admitted that Jeevan Arogya Yojana is a cash benefit policy, in such a situation, if the disease is caused by alcohol, it cannot be paid.
Do not forget this mistake even after forgetting the insured
The Supreme Court in its order made it clear that if a disease, addiction or habit was hidden while taking the policy and later caused the same death or treatment, the insurance company cannot be obliged to give a claim. In this case, the court also dismissed the 2015 Sulbha Prakash Motegaonkar vs. LIC case, which said that if the hidden information did not cause death, the claim cannot be rejected. But in the case of Mahipal Singh, the hidden thing was the reason for death.
This matter is a warning for crores of people who ignore small things while taking insurance policy. Insurance is a trust contract, in which both sides have to have complete transparency. If the policyholder hides any important information related to himself, then his family may have to face a lot of trouble during the crisis.