Non-Disclosure of Material Fact in Insurance Matters

The term Non-disclosure of Material Fact has not been defined in Insurance Act. Insurance companies were rejecting the claims of the consumers on the plea of pre existing –disease every now and then.

Insurance companies were rejecting the claims of the consumers on the plea of pre-existing disease in almost every case  which means claimant had not disclosed the ailment he was having at the time of filling up the prescribed form. Defining pre-existing disease in insurance matter in the matter of Asha Rani Goyal  v Life Insurance Corporation .in the year 2000, three criteria were set up for coming to the conclusion that the claimant had disease pre-existing as here under:

1) One must have concealed the fact

2) The fact so concealed should be of such importance that could affect the policy co. to take decision whether to issue policy or not.

3) The person so insured must be aware of that particular disease

And now unless it is proved that claimant was aware of the particular disease and had taken medicine or consultation for that particular disease his claim cannot be rejected merely due to such symptoms.

Ref. Asha Rani Goyal v Life Insurance Corporation .in the year 2000, SC