- Once an insurance company accepts that the concealment of a disease was not material, it cannot later refuse to reimburse the insured for medical expenses incurred or refuse to renew the insurance policy.
- A disease is considered material if it would have influenced the insurer’s decision to issue the policy or to set the premium.
- The insurer has the burden of proving that the concealment of a disease was material.
- If the insurer is unable to prove that the concealment of a disease was material, the insured is entitled to reimbursement of medical expenses and renewal of the insurance policy.
The Supreme Court made these observations in the case of Sheryl Sebastian v. United India Insurance Company Limited. In this case, the insured had concealed a history of hypertension when she applied for a medical insurance policy. However, she later developed ovarian cancer and filed a claim for reimbursement of her medical expenses. The insurer refused to reimburse the expenses, arguing that the insured had concealed a material fact.
The Supreme Court held that the insurer had not proved that the concealment of hypertension was material. The court noted that hypertension is a common condition and that it would not have been a major factor in the insurer’s decision to issue the policy or to set the premium.
The Supreme Court also held that the insurer could not refuse to renew the insurance policy on the basis of the concealment of hypertension. The court noted that the insured had not made any false or misleading statements about her health and that she had paid all the premiums on time.
The Supreme Court’s judgement in this case is a welcome relief for insureds who have concealed a minor health condition when applying for a medical insurance policy. The judgement makes it clear that insurers cannot use such concealment as a pretext to deny reimbursement of medical expenses or to refuse to renew an insurance policy.
LIVE LAW https://www.livelaw.in/supreme-court/supreme-court-medical-insurance-once-insurer-accepts-that-concealment-of-disease-was-not-material-reimbursement-renewal-cant-be-refuse-232132 (LAST VISITED 7th , JULY 2023 )
WRITTEN BY – ADITYA SINGH, COLLEGE NAME – SHRI RAMSWAROOP MEMORIAL UNIVERSITY, SEMESTER – 6th , an intern under LEGALVIDHIYA
