The Kerala High Court has held that when an insured person undergoes treatment or surgery based on the expert opinion of a qualified doctor, denial of the corresponding insurance claim by the insurer constitutes a violation of the right to life under Article 21 of the Constitution. Justice P.M. Manoj delivered the judgment in a writ petition filed by a policyholder who had regularly paid premiums to the Life Insurance Corporation of India (LIC) since 2008, yet found two substantial claims either arbitrarily restricted or rejected.
The petitioner first claimed about ₹60,093 for medical treatment; the insurer restricted payment to ₹5,600. A subsequent claim of approximately ₹1,80,000 was rejected on the ground that the treatment expense related to a “pre-existing illness,” as per LIC’s policy terms. The petition challenged these actions, arguing that the rejection and restriction of claims amount to effective denial of medical treatment which is necessary for preservation of life and health, especially when medical advice has been followed in good faith.
The High Court referred to established Supreme Court precedents, including Paschim Banga Khet Mazdoor Samithi v. State of West Bengal, Consumer Education and Research Centre v. Union of India, and State of Punjab v. Mohinder Singh Chawla, which affirm that the right to health care and medical treatment are integral components of the fundamental right to life. Drawing on these, the Court observed that insurers must act fairly and in good faith, especially in contracts of insurance which are essentially contracts of adhesion—where insured persons have little scope for negotiation over the terms. The insurer’s conduct in rejecting or limiting claims in non-substantial or ambiguous situations erodes public trust and defeats the very purpose of insurance.
The Court quashed LIC’s decisions refusing or curtailing the claims in question. LIC was directed to honour the petitioner’s claims without further delay, noting that the policy in effect was valid up to March 31, 2024. The judgment emphasises that insurers cannot deny claims on grounds that are not material or substantial, or use vague definitions such as “pre-existing illness” without putting the burden on themselves to show that the condition falls squarely within policy exclusions.
This ruling establishes that denial of medical insurance claims in circumstances where treatment is availed upon medical advice and premiums have been duly paid amounts to deprivation of the right to life and health. The Court mandated that insurers adhere to principles of fairness, clarity, and good faith, and ensure timely disbursement of amounts legitimately due under policies.
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