Denial of medical insurance claim violates right to life under Article 21: Kerala HC

In a judgment concerning the Life Insurance Corporation of India (LIC), the Kerala High Court has held that denying an insurance claim for medical treatment amounts to a violation of the fundamental right to life under Article 21 of the Constitution. The ruling came in the context of a writ petition filed against LIC after the insurer rejected and restricted the petitioner’s medical insurance claims despite regular premium payments since 2008.

As per Live Law report, Justice P.M. Manoj delivered the judgment, emphasising that once an insured person undergoes treatment or surgery based on the expert opinion of a qualified medical professional, the insurer cannot arbitrarily refuse the claim. The Court stated that such rejection effectively denies necessary treatment and infringes upon the citizen’s fundamental right to life and health.

The petitioner had filed the case after LIC limited his first claim to ₹5,600 against medical expenses of ₹60,093 and subsequently rejected a second claim of ₹1,80,000, citing a “pre-existing illness” as the reason.

Drawing on Supreme Court precedents, the Court reiterated that the right to medical treatment forms an integral part of the right to life. It held, “Declining the claim in respect of the treatment undergone amounts to denial of treatment itself. Thereby, there is violation of the right to life provided under Article 21 of the Constitution of India.”

The judgment also criticised insurers for exploiting the vulnerability of policyholders during medical emergencies, warning that such conduct “defeats the very purpose of health insurance and erodes public trust.” It underlined that life insurance aims to provide security against unforeseen contingencies, which is undermined when claims are denied for reasons that are neither substantial nor material. The Court stressed that insurance is a contract of utmost good faith, imposing a duty of fairness on insurers. Contracts of adhesion such as insurance policies must be construed in favour of the insured, and repudiation on grounds of minor inaccuracies or ambiguities is unjustifiable.

Accordingly, the Kerala High Court quashed LIC’s rejection of the petitioner’s claims and directed the corporation to process the claim without delay, noting that the policy remains valid until March 31, 2024.