In Brief
A 55-year-old man with diabetes obtained an overseas mediclaim policy and underwent required medical tests, all showing normal cardiac results. While traveling to the USA, he suffered a heart attack and received treatment costing approximately USD 241,932. The insurer repudiated the claim, alleging non-disclosure of hyperlipidemia (a pre-existing condition). The Supreme Court held the repudiation unlawful. The insured had disclosed his diabetes; the insurer, as a prudent insurer, examined the medical reports and issued the policy. Statins (prescribed preventively for diabetics) do not evidence pre-existing hyperlipidemia. The Court emphasized that cardiac events in diabetics are not automatically pre-existing conditions, and insurers cannot repudiate based on disclosed conditions they initially assessed and accepted. Exclusion clauses must be clear and are construed against the insurer.
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