Home Loan – Add-on Insurance– Exclusion Clause neither furnished nor made aware to the insured

The respondent – complainant had taken two home loans as co-borrower with her husband from the Appellant – Insurance Company. Insurance policy under the scheme in which the Insurer was the Master Policy Holder of a Group Master Policy valid till 20.6.2016 was taken.  

A unique Certificate of Insurance was allotted and the respondent was enrolled under the Group Insurance Scheme with 21.12.2013 as the date of risk for Rs.71,49,174/-.

On 20.03.2014, the complainant informed her illness of carcinoma of right breast to the Insurer and hospitalization on 15.3.2014.

The claim was rejected on the ground that “any critical illness existed at or occurred within six months of the entry date” is excluded.

The contention of the insured was that the Master Policy containing the terms and conditions including exclusion clause was not given by the respondent.   The said policy was produced with the written statement in the State Commission.   Therefore, the exclusion clause is not binding and enforceable against the Insured.

The moot and important issue was whether the critical illness was covered under the Insurance Certificate issued as an add-on to the loan availed under the Master Policy.

HELD that the terms and conditions including exclusion clause were neither furnished to the Respondent nor made aware of the same.   Consequently, the terms and  conditions of the Exclusion Clause of the policy were not binding on the Respondent. 

The repudiation of the claim has constituted deficiency in service and unfair trade practice.

Order dated 2.4.2024 of the National Consumer Disputes Redressal Commission in First Appeal No.614 of 2020 of Bajaj Allianz Life Insurance Co Ltd  Vs. Bharti Mahaveer Jain