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LAHORE: The insurance companies are involved in denying death claims on the pretext that the policy was obtained through fraud, misrepresentation and by concealment of pre-insurance illness.

According to sources, the insurance companies forcefully contest their stance before the appellate forums that the post-death inquiry suggests that the health of deceased policyholder was of the nature that he committed sheer violation of the doctrine of utmost good faith, which is considered as the basis of the insurance contract.

Therefore, any such contract becomes unenforceable and the nominee of deceased policyholder is not entitled to recover the insurance claim.

It may be noted that both the Federal Insurance Ombudsman and the President of Pakistan have taken notice of the practice on the part of insurance companies, terming it maladministration with a direction to ensure medical test of insurers at the time of selling insurance policy to honour death claims.

In most of such cases, the sources added, the deceased policyholders obtain insurance on non-medical basis, which is assumed no medical test at the time of the issuance of a policy as opposed to a traditional policy where medical tests (including blood test, blood pressure etc.) are required.

The insurance companies, they added, rely upon the declaration made by the insured persons make at the time of making the contract of insurance. These contracts fall under the doctrine of the utmost good faith, which means that any concealment at the time of signing a contract would lead to cancellation of the same.

According to the sources, the insurance companies take the support of his doctrine to deny claims on the basis of investigation reports submitted by their inquiry officers, revealing that the deceased was an addict that was not given in the declaration at the time of insurance agreement.

Interestingly, the insurance companies resist to recovery of insurance claims despite the fact that the deceased policyholders are found paying annual premium regularly.

The sources said repudiation of insurance claims is carried out while raising a controversy related to the alleged fraud or misrepresentation by the deceased while purchasing the policy.

However, all such claims prove baseless in front the of death certificate suggesting the deceased suffers natural death.

The inquiry officers prefer to dig out incomplete evidences to prove their viewpoint, which could not be sustained at the appellate forums due to glaring legal discrepancies, said the sources.

Copyright Business Recorder, 2023

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