Consumer Court: Smoking Alone Not Valid Ground to Deny Health Insurance Claim

In a landmark decision, a consumer court has directed a public sector insurance company to pay a ₹9.4 lakh claim for lung cancer treatment, emphasizing that a policyholder's smoking habit alone does not justify claim denial without definitive medical proof.

In 2018, a family of four secured a ₹1 crore health insurance policy from a PSU insurer, with the father, a self-declared smoker, paying an annual premium of ₹69,000. In April 2023, he was diagnosed with lung cancer after experiencing symptoms like chest pain and coughing up blood. The family sought a cashless claim for his treatment, which amounted to ₹9.4 lakh.

However, the insurer rejected the claim, citing policy exclusions related to illnesses arising from "excessive smoking and drinking." They argued that the policyholder's long-term smoking habit,15–20 cigarettes daily for 40 years fell under this exclusion. Even after the family paid the hospital bills out-of-pocket and sought reimbursement, the insurer maintained its stance, leading to formal grievances and appeals, all of which were dismissed.

The consumer court found the insurer's justification insufficient. It noted that the insurer failed to provide concrete medical evidence directly linking the lung cancer diagnosis to the policyholder's smoking habit. The court emphasized that assumptions or generalizations about smoking-related illnesses are not adequate grounds for claim denial.

Furthermore, the court highlighted that nicotine, found in cigarettes, is not classified as an intoxicant under the policy's terms. Therefore, exclusions related to intoxicants did not apply in this case. The court ordered the insurer to pay the full claim amount with 8% interest within 10 days and imposed a ₹50,000 penalty for deficient service.

Insurance advisor Nikhil Jha commented on the case, stating on a post at X (social media platform):

(Input from various sources)

(Rehash/Sakshi Thakar/MSM)