Insurer Rebuked After Wrongful Claim Denial; Consumer Panel Orders Rs 66.5 Lakh Compensation

A key order passed by the Mumbai Suburban District Consumer Disputes Redressal Commission has come into focus, according to a recent report by The Times of India. The panel has directed a major private health insurer to release Rs 66.5 lakh to a Juhu resident after his overseas cancer treatment claim was rejected without valid grounds. The commission went a step further and criticised the insurer for engaging in unfair practice by cancelling the policy midway and refusing to clear cashless treatment approval.

A Policy Meant To Offer Global Protection

The dispute began with Alok Bector, who had opted for the Heartbeat Family First Platinum plan in 2017. The insurer had pitched the plan as an upscale health cover with overseas benefits, including the option of seeking care in the US. For a family seeking comprehensive protection, the promise of worldwide coverage was a key draw.

The situation changed drastically in 2018 when Bector was diagnosed with colorectal cancer. Seeking the best possible medical help, he travelled to the Memorial Sloan Kettering Cancer Center in the US and approached his insurer for cashless treatment approval, a facility clearly mentioned in his policy. Instead of supporting the claim, the insurer accused him of hiding a pre-existing ailment, namely asthma, and cancelled the policy the following year. The company then refused cashless approval and directed him to apply for reimbursement once the treatment was complete.

The consumer panel found the insurer’s stance untenable. After reviewing medical documents, it was noted that asthma had no connection whatsoever with colorectal cancer. The alleged non-disclosure, therefore, had no bearing on the treatment sought. The panel also remarked that by cancelling the policy at the pre-authorization stage itself, the insurer had effectively blocked the very system it later accused the claimant of not following.

What The Commission Concluded

Once the evidence was placed before the bench, the panel held that the insurer’s approach lacked fairness and transparency. The commission stressed that insurers cannot cherry-pick clauses to deny genuine claims, especially when the undisclosed information has no medical relevance to the illness. If a company promises worldwide cover, it has to stand by that promise and not fall back on technicalities later.

As part of the order, the insurer must reimburse the full Rs 66.5 lakh that Bector spent on his treatment abroad. The panel also awarded Rs 40,000 as compensation for the hardship, anxiety, and legal expenses he was forced to bear.

An important observation from the commission was on jurisdiction. The panel also pointed out that consumer courts are well within their rights to take up cases like this, regardless of how large the claim is. What matters is the premium paid, not the scale of the claim, a point that often confuses policyholders.

Why This Verdict Matters

The ruling makes one point very clear: a past condition matters only if it has a real link to the ailment for which the claim is being made. People shouldn’t lose their claim just because they once had a condition that has nothing to do with their current illness, and insurers can’t use loose or catch-all wording to justify a rejection.

For customers, the case underscores two simple takeaways: declare your medical history honestly, and do not hesitate to challenge a rejection that seems unreasonable. For insurance companies, the verdict signals the need for careful evaluation of claims and fair decision-making. Cancelling policies abruptly or weaponising technicalities can attract strict censure.

With global health plans becoming more common among Indian families, the ruling highlights the growing need for straightforward terms and responsible behaviour from insurers. At its heart, the decision is about basic fairness: a person coping with a serious illness shouldn’t be dragged into an avoidable financial crisis because an insurer acted without good reason.