The Life Insurance Corporation of India (LIC) was ordered by the National Consumer Disputes Redressal Commission (NCDRC) to pay Rs 1,60,812 after an 8-year-long battle with a ‘Jeevan Arogya’ insurance policy holder. LIC Jeevan Arogya is a health insurance policy that covers certain specified health risks and provides support in times of medical emergencies.
The primary reason for such an extended battle between the insurance behemoth and the policyholder was because LIC officials considered the surgery the policyholder was making a claim for was a non-major one and hence paid a smaller amount. They contended that despite the policyholder incurring Rs 2,16,827 for her father’s hernia operation, she was eligible for only Rs 17,100 insurance claim.
While LIC did not outrightly reject the Jeevan Arogya insurance claim, but the amount (Rs 17,100) offered to the policyholder for reimbursement of hospitalisation expenses of her father was too low since the policyholder already spent Rs 2,16,827 on various hospital bills. Disappointed with the lower claim amount, the policyholder decided to fight against LIC.
What does LIC Jeevan Arogya insurance policy offer?
According to the policy brochure of Jeevan Arogya as of January 30, 2024 “This policy is a non-linked health insurance plan which provides cover against certain specified health risks. LIC Jeevan Arogya gives the following benefits:
- Financial protection in case of hospitalisation, surgery, etc
- Increasing health cover every year,
- Lump sum benefit irrespective of actual medical costs,
- No claim benefit,
- Flexible benefit limit to choose from, and
- Flexible premium payment options.”
According to the policy brochure, Jeevan Arogya health insurance policy offers the following features:
- Hospital cash benefit (HCB),
- Major surgical benefit (MSB),
- Day care procedure benefit,
- Other surgical benefit,
- Ambulance benefit, and
- Premium waiver benefit (PWB).
The premium for a 30-year-old person with a sum assured of Rs 1 lakh is Rs 2242.9 per annum for enrolling in Jeevan Arogya health insurance policy as on date.
Why did LIC reduce the insurance claim from more than Rs 2 lakh to Rs 17,100?
The complainant after completion of treatment of her father in Chennai returned to Agartala, Tripura and submitted her claim of Rs 2,16,827 along with medical prescriptions, bills and vouchers and other proofs with a forwarding letter addressed to the Chief Manager, LIC, Agartala Branch on August 8, 2016.
After receiving the documents and the forwarding letter, the manager (HI) of LIC’s Silchar divisional office asked the complainant for some information. The complainant replied to the queries on September 14, 2016. After receiving the replies, the Chief Manager of Agartala branch of LIC visited the house of the complainant on January 12, 2017.
On March 27, 2017 the complainant received a letter from the manager (HI) of LIC’s Silchar Divisional Office. The letter informed her (the complainant) that that claim raised by her was reduced to Rs 17,100 as of ‘Other Surgical Benefit’ under the policy. According to the complainant, she fulfilled the terms and conditions of the policy, but in spite of that, LIC had reduced her claim on the ground that ‘ventral hernia’ surgery was not a major surgery.
LIC reduced the surgery claim amount because laproscopic ‘ventral hernia’ surgery was not covered in the list of ‘Major Surgical Benefit (MSB)’. Further, LIC said that the insured ought to disclose the fact that her father was suffering from hypertension for ten years and coronary artery disease for the last six years which was within knowledge at the time of filling the proposal form.
Battle starts in District Consumer Forum in 2018
LIC accepted the fact that the father of the complainant was admitted at Apollo Hospitals, Chennai for a hernia operation on July 18, 2016. He was discharged after five days on July 22, 2016. LIC also accepted the fact that this hernia surgery was made five years after the policy was purchased when the waiting period for inclusion of hernia surgery in the policy was two years.
“As per the policy, the specific waiting period for getting benefit out of the policy for treatment of Hernia is two years. We are of the opinion that the complainant should not be deprived of getting Insurance benefit for the “Ventral Hernia Surgery” which was undertaken by her father at the Apollo Hospital, simply on the ground that such a surgery does not find place in the list of major surgical benefits,” said the District Forum in an order dated June 28, 2019. The District forum ordered LIC to pay Rs 1,60,812.
After losing the case in the District Consumer Forum, LIC took the battle to the State Consumer Commission.
Battle continues in State Consumer Commission
The state commission heard the arguments made by both LIC and the complainant. The state commission passed an order on January 18, 2020 which was again not in favour of LIC. The order read, “It appears from the inpatient bill issued by the Apollo Hospitals, Chennai that the total treatment cost was Rs 2,11,826.89. The District Forum in fact directed LIC to pay Rs 1,60,812 but did not allow the other charges like equipment, medical administration and non-pharmacy material etc. thus, in fact, the district forum also did not allow the entire actual cost of treatment. Though according to us, the complainant is entitled to get the entire cost of treatment. We are of the opinion that, if surgery like ‘ventral hernia’ comes within the purview of the Policy in question, then an insured is entitled to get the actual cost of treatment, but there is no appeal before us by the complainant. Thus, we are not in a position to provide the actual cost of treatment.”
Not satisfied with the order of the State consumer commission, LIC filed an appeal in NCDRC.
NCDRC settles the score
NCDRC said in their order dated January 12, 2024 that after having gone through the Jeevan Arogya insurance policy’s terms and conditions they are not in agreement of the exclusion of the hernia surgery under major surgical benefit.
“We are not in agreement with the contentions of the Petitioner (LIC) that ‘ventral hernia’ is not covered under the list of ‘Major Surgical Benefit’. We also do not agree with the contention that there was any suppression of material facts herein. Both the State Commission and District Forum have passed well-reasoned order(s). We find no illegality or material irregularity or jurisdictional error in the order of the State Commission, hence the same is upheld,” said NCDRC in the order.