Bengaluru Consumer Forum Slams Insurer, Orders Rs 5 Lakh Compensation in Senior Citizen's Cancer Claim Battle
In a significant ruling that underscores consumer rights in healthcare disputes, the II additional Bengaluru Urban district consumer disputes redressal commission has held Star Health and Allied Insurance Company Ltd guilty of deficiency in service for denying a cancer treatment claim filed by a 70-year-old policyholder. The commission has directed the insurer to reimburse medical expenses with interest and pay compensation, bringing the total financial liability to nearly Rs 5 lakh.
The Chronology of the Insurance Dispute and Medical Emergency
The case revolves around Manjula Chandranth Sumathi, a senior citizen residing in Banashankari I Stage, Bengaluru. On April 1, 2023, Manjula purchased a health insurance policy from Star Health and Allied Insurance Company Ltd, explicitly declaring her pre-existing conditions of diabetes and hypertension. She paid a premium of Rs 45,825, inclusive of taxes, securing a coverage of Rs 10 lakh valid until March 31, 2024. The policy was subsequently renewed on March 12, 2024, for the period from April 1, 2024, to March 31, 2025, with the same premium amount.
In May 2024, Manjula discovered a lump in her right breast. Following medical consultation, she was admitted to Excel Care Hospital on July 7, 2024, where she underwent inpatient treatment for breast cancer from July 7 to July 9. The hospital expenses amounted to approximately Rs 3 lakh for the final bill, with an additional Rs 2 lakh incurred for pharmacy charges, bed fees, and related medical costs.
Claim Submission, Immediate Repudiation, and Allegations of Non-Disclosure
On July 22, 2024, Manjula's daughter and nominee, Swetha Sumathi, aged 39, approached the insurer's Jayanagar branch to seek reimbursement for the medical expenses. The insurance company issued a query letter on July 27, followed by another communication on August 22 requesting additional documents, all of which were promptly submitted by the complainant.
However, within just two days of receiving the documents, the insurer repudiated the claim, alleging that Manjula had failed to disclose a past illness. The company subsequently issued a notice proposing the cancellation of the insurance policy altogether. Manjula vehemently contested this rejection, arguing that it constituted a clear deficiency in service, especially since no pre-policy medical examination had been conducted despite her status as a senior citizen.
Insurer's Defense and Allegations of Material Misrepresentation
In its defense before the consumer commission, Star Health and Allied Insurance Company asserted that Manjula had suppressed material facts by only disclosing diabetes and hypertension while concealing a serious pre-existing cardiac condition. The insurer relied on medical records, including a discharge summary from Apollo Hospital, which indicated that Manjula had been hospitalized and was a known case of inferior wall myocardial infarction. The records further revealed that she had undergone PTCA/angioplasty in January 2021 and suffered from conditions such as ischaemic heart disease and obesity.
The insurance company argued that this non-disclosure of a life-threatening ailment prior to the policy's inception amounted to material misrepresentation, justifying the repudiation of the claim and the subsequent action to cancel the policy. They maintained that their decision was legally valid and in accordance with the terms of the insurance contract.
Consumer Commission's Scrutiny and Landmark Ruling
After meticulously examining all submitted documents and hearing arguments from both parties, the consumer commission delivered a decisive verdict. The commission observed that the prior cardiac condition had no direct nexus or connection with the breast cancer treatment for which the claim was filed. Importantly, the forum highlighted that no medical tests were conducted by the insurer before issuing the policy, despite the complainant being a senior citizen, which is a critical oversight in such insurance agreements.
The commission concluded that the repudiation of the claim amounted to a clear deficiency in service on the part of the insurance company. On March 5, 2026, the consumer forum issued a comprehensive order mandating Star Health and Allied Insurance Company to restore Manjula's policy immediately.
The financial directives included:
- Reimbursement of Rs 4.5 lakh with 9% interest per annum from the date of repudiation until actual payment.
- Compensation of Rs 20,000 for the mental agony and distress endured by the senior citizen.
- Litigation costs of Rs 10,000 to cover the expenses incurred during the legal proceedings.
This ruling not only provides justice to the aggrieved policyholder but also sets a precedent for holding insurance companies accountable for arbitrary claim denials, particularly in cases involving senior citizens and critical illnesses like cancer.
