LIC’s Order Denying Payment For Death Under Alcohol Influence Overturned

Insurer ordered to pay accidental cover after it denied claim

Insurance companies reserve the right to deny a claim if they find valid grounds. They can do so only in the first three years of the policy. In case of the revival of policies, the three-year clause will be effective from the date of revival and not the date of issuance. 

However, the Life Insurance Corporation (LIC), in a case, denied accidental insurance cover because the policyholder, who died due to drowning, was under the influence of alcohol at the time of death, reported The Financial Express.

After the complainant, the father of the policyholder, approached the National Consumer Disputes Redressal Commission (NCDRC), the order, however, was reserved.

The policyholder had purchased the LIC Jeevan Anand policy with profits and accident benefits. The risk covered was Rs 4,70,000. The report added that this included Rs 2,35,000 as the sum insured and Rs 2,35,000 on account of accident benefits. 

After the insured person’s death on June 8, 2014, the insurance company denied to pay the accidental cover citing that the insured was under the influence of alcohol at the time of death, which was a violation of the condition of the policy, the report said.

As per the report, the insured’s father approached the district forum, where the order was reversed, stating there was no conclusive evidence to suggest the death was under the influence of alcohol.

Though the Forensic Science Laboratory report showed the presence of 59.45 mg per cent ethyl alcohol in the policyholder’s blood, the forum said no urine sample was taken during the post-mortem.

The insurer challenged the order in the state forum, where it was settled in their favour before finally, the complainant approached the NCDRC.

In its order dated September 14, 2022, the commission noted that there was no evidence to prove that “stomach contents had the smell of alcohol and whether blood and urine samples of the deceased were collected or not,” the report stated.