In Brief
A family taken a family mediclaim policy covering four members with a sum insured of Rs. 5 lakh for 2014-15. When the son required hospitalization with medical expenses exceeding Rs. 8.5 lakh, the insurance company initially repudiated the claim citing pre-existing disease, then paid only Rs. 27,550. The Supreme Court held that since the son's individual mediclaim had been continuously held since 2007 without any pre-existing disease disclosure, the company cannot later rely on pre-existing disease. The liability under the family policy is capped at 50% of the sum insured (Rs. 2.5 lakh) per individual illness. The company must pay the balance amount along with Rs. 50,000 for mental agony and Rs. 30,000 for litigation costs, with interest at 7.5% per annum.
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