Insurance claim dispute resolved: Man victorious in consumer court after local consumer panel intervention in Indore
In a landmark decision, the Indore District Consumer Commission has ruled in favour of Suresh Kumar Jain, a policyholder from Indore, Madhya Pradesh, who had his health insurance claim denied by the Oriental Insurance Company.
Jain, who bought the Happy Family Floater Medical policy on August 14, 2013, was admitted to the Vishesh Hospital in Indore on July 7, 2017, where a stent was implanted in his heart. However, the insurance company rejected his claim, citing Clause 4.1 of the policy, which restricts coverage for pre-existing diseases within the first four years.
The Akhil Bharatiya Grahak Panchayat (ABGP), an Indian consumer protection organisation, took up Jain's case and filed it in the Indore District Consumer Commission to challenge the denial. Manoj Pawar, the ABGP's representative, stated that the insurance company rejected the claim because Jain's condition was linked to pre-existing diseases.
The ruling, made in the case filed by the ABGP on behalf of Suresh Kumar Jain, stated that the Oriental Insurance Company must pay the claim amount of ₹2,49,581 within 45 days. The claim amount will have a 6% interest added to it. Furthermore, the company has been ordered to pay ₹5,000 towards litigation expenses.
It is generally considered unfair and legally restricted for insurance companies to deny health insurance claims based on pre-existing conditions after the initial exclusion period specified in the policy. In this case, the pre-existing diseases were only covered after four years, as per the policy.
Pre-existing condition clauses often apply only for a limited initial exclusion period—usually the first two years of a long-term disability (LTD) or health insurance policy. After this period, denying claims based on those conditions is generally impermissible.
Insurers are required to act in good faith; systemic denials after the initial period can be challenged legally, and many law firms have experience overturning wrongful denials tied to pre-existing condition exclusions. Patients or policyholders facing such denials should review their policy carefully and may have grounds to appeal or seek legal recourse.
This incident serves as a reminder for insurance companies to adhere to fair practices and regulations, ensuring that policyholders receive the coverage they are entitled to, especially after the initial exclusion period for pre-existing conditions.
- The Indore District Consumer Commission's ruling on Suresh Kumar Jain's health insurance claim highlights the importance of insurance companies adhering to fair practices, as they are required to pay the claim amount for chronic diseases and medical conditions, such as his heart-related issue, once the initial exclusion period for pre-existing conditions has passed.
- In India, it is generally unfair and legally restricted for insurance companies to deny health insurance claims based on pre-existing conditions after the initial exclusion period specified in the policy, as seen in the case of the Oriental Insurance Company and Suresh Kumar Jain.
- After the four-year initial exclusion period, insurers cannot deny health insurance claims based on pre-existing conditions, such as chronic diseases and medical conditions, as they are expected to act in good faith and provide health and wellness coverage to policyholders according to regulations.
