Policy wordings are sacrosanct

When a term is expressly defined under the policy, its general dictionary meaning or common usage and interpretation become irrelevant. The term has to be strictly construed as per the definition given in the policy. You may think that you have proper insurance coverage, when the fact is that you are not covered. Consequently, you may have to bear your own medical expenses. This is what Hardeep Singh learnt the hard way after taking a policy from ICICI Prudential Life Insurance.

Hardeep's policy, which was valid from 29.6.2004 to 28.6.2009, provided for an extended benefit to cover critical medical illnesses. During the subsistence of the policy, Hardeep developed a heart problem, for which he underwent angioplasty at the cost of Rs 2.5 lakh. He lodged a claim, but the insurance company refused to pay on the ground that angioplasty was not covered under the critical illness clause of the policy.

Hardeep challenged the repudiation by filing a complaint before the Fatehgarh Sahib District Forum, contending that his claim was wrongly rejected. The insurer contested, pointing out that it was not a mediclaim policy but was actually a life insurance policy which included a critical illness benefit. The scope of coverage for critical illness did not cover angioplasty. The insurer justified the repudiation.

The forum allowed the complaint and ordered settlement of the entire claim along with interest, compensation and costs. ICICI Prudential challenged the order before the Punjab State Commission, which considered the policy conditions and concluded that angioplasty was not covered under the critical illness benefit. So the State Commission set aside the Forum’s order.

Hardeep then filed a revision petition. The National Commission noted that it was a life insurance with specific additional benefits to cover disability and critical illness to a limited extent as specified under the terms and conditions governing the policy. The scope of critical illness benefit provided that it would cover certain specified critical illnesses which might occur after six months of issuance of policy but before policy anniversary when the insured completes 65 years of age. The treatment for specified critical illness included certain types of cancer, coronary artery bypass graft (CABG) surgery and excluded balloon angioplasty, laser or any catheter-based procedures, kidney failure, strokes resulting in permanent neurological damage, etc.

The Commission concluded that in view terms governing the policy, it was clear that balloon angioplasty, laser or any catheter-based procedures were not covered. So even though heart problem may be considered a critical ailment, the claim was not payable under the policy which specifically defined the term “critical illness”. Accordingly, by its order of 16.10.2017 delivered by Justice Ajit Bharihoke, the National Commission dismissed Hardeep's revision and held that the complaint had rightly been dismissed as the claim did not fall within the scope of the policy.

It is, therefore, necessary to carefully read the policy and understand the scope of coverage and benefits available.

(The author is a consumer activist)