If you are not honest while taking insurance, you may face big problems later. There are many cases where insurance companies did not pass the claim on time, and people had to go to court but were still disappointed. The case of Mahipal Singh from Haryana is also like this.

On March 28, 2013, Mahipal Singh took an insurance cover from Life Insurance Corporation (LIC). He died on June 1, 2014. After his death, his wife Sunita Singh filed an insurance claim, but LIC rejected it. This case was shared in detail in a post on a group named r/personalfinanceindia on the social media platform Reddit.

Sunita Singh’s husband Mahipal Singh bought LIC’s Jeevan Arogya Health Plan in 2013. While taking the policy, he declared that he does not drink alcohol, does not smoke, and does not use tobacco. But within a year he was admitted to a hospital in Jhajjar, Haryana. He was suffering from stomach pain and vomiting. He was treated for about a month and then he died of cardiac arrest.

After his death, Sunita Singh filed an insurance claim with LIC. But LIC rejected the claim. LIC said that his health problem was due to alcohol, and the policy does not cover such cases. Medical records showed that Mahipal Singh used to drink a lot of alcohol and because of this he had a serious kidney disease.

Case reached Supreme Court

Sunita then went to the District Consumer Court. The court ordered LIC to pay Rs 5,21,650 with interest and compensation. Later, the State Consumer Commission and the National Consumer Commission also agreed with this order. They said that Jeevan Arogya is a reimbursement plan and not a fixed cash policy.

LIC did not accept this and went to the Supreme Court. On March 3, 2025, the Supreme Court gave the decision in favor of LIC. The court said that alcohol addiction cannot be hidden from the company because it affects the risk of insurance. The judges also said that Mahipal Singh’s drinking damaged his liver, which caused his hospitalisation and death. The court also said that Jeevan Arogya is a cash benefit policy, not a reimbursement plan, so LIC’s claim rejection was correct.