Summary
The family mediclaim policy’s 50% limit for one illness applied to the current Rs.5 lakh family sum insured, rather than an earlier individual policy amount. Continuous insurance since inception, when no disease existed, defeated the insurer’s pre-existing-disease objection on these facts. The claimant was awarded Rs.2.5 lakh less payments already made, with compensation, litigation costs and interest on the balance.
Issues
- Whether the single-illness limit was calculated on the current family cover or an earlier individual policy.
- Whether the insurer could rely on pre-existing disease despite continuous renewals from a disease-free inception.
Held
- The policy expressly limited expenses for one illness to 50% of the family sum insured. Under the Rs.5 lakh family policy, the applicable maximum was therefore Rs.2.5 lakh, not the full family cover or half an earlier individual sum insured. (¶¶ 10–11, 13)
- The insurer admitted continuous coverage from 2007–2008 and absence of disease at inception. With regular renewals through the relevant year, the asserted pre-existing-disease ground could not justify rejection on these facts. The insurer had also itself admitted part of the claim. (¶¶ 10, 12)
- Treatment expenses exceeded the policy limit, entitling the claimant to Rs.2.5 lakh less amounts already paid, together with Rs.50,000 for mental agony and harassment and Rs.30,000 litigation costs. (¶ 13–14)
- Interest at 7.5% per annum was payable on the balance amount from filing of the District Forum complaint until actual payment. (¶ 14)
Result
Appeal allowed to the extent of Rs.2,50,000 less amounts already paid, plus Rs.50,000 compensation and Rs.30,000 litigation costs. Balance payable carries 7.5% annual interest from the complaint to payment.