Court’s Decision
The Division Bench of the Kerala High Court, comprising Justice Anil K. Narendran and Justice Muralee Krishna S., allowed the appeal filed by the Life Insurance Corporation of India (LIC) and set aside the judgment of the Single Judge that had earlier directed the insurer to disburse the cancer insurance benefit to the policyholder.
The Court held that the first diagnosis of cancer was made within the 180-day waiting period specified under Clause 8(G) of the LIC Cancer Cover Policy. The subsequent histopathology report dated 28.09.2021 was merely a confirmation of an earlier diagnosis made on 25.08.2021 and could not be treated as the “first diagnosis” under the terms of the policy.
Therefore, the insured was not entitled to any benefit under the policy as the diagnosis occurred within the waiting period. The Bench further held that there was no suppression of material fact by the insured regarding her mother’s history of cancer, but nonetheless, the insurance claim was barred due to the timing of the diagnosis.
Facts
The respondent, a 44-year-old woman, had taken an LIC Cancer Cover Policy for ₹10,00,000 on 24 September 2019. Due to her stay abroad, she could not renew the same and later obtained a fresh policy on 16 March 2021 upon returning to India, after paying the premium and completing the required formalities.
On 25 August 2021, she was hospitalized in Life Line Hospital, Adoor, due to profuse bleeding. Following a Dilation and Curettage (D&C) procedure, doctors advised her to consult specialists at Lake Shore Hospital, Ernakulam. There, she underwent surgery on 9 September 2021, and the biopsy result dated 28 September 2021 confirmed Carcinoma Endometrium Grade II.
She submitted a cancer claim (Exhibit P2) to LIC. However, LIC rejected the claim via letter dated 6 January 2023, stating that the first diagnosis of cancer (25 August 2021) fell within the 180-day waiting period from the date of commencement of the policy. Her subsequent grievance before the LIC Grievance Redressal Office and appeal before the Insurance Ombudsman were also rejected.
The insured then approached the High Court by way of a writ petition, seeking to quash the rejection and direct LIC to release the insurance proceeds. The Single Judge accepted her plea, holding that the diagnosis date was 28 September 2021, i.e., after 180 days, and directed LIC to pay the claim. Aggrieved by that order, LIC filed the present appeal.
Issues
- Whether the diagnosis of cancer dated 25 August 2021 could be treated as the first diagnosis within the meaning of Clause 13 and Clause 8(G) of the LIC Cancer Cover Policy.
- Whether the subsequent biopsy confirmation dated 28 September 2021 could extend the waiting period.
- Whether there was suppression of material fact regarding the family history of cancer in the policy proposal.
Petitioner’s (LIC’s) Arguments
LIC argued that the first diagnosis of cancer occurred on 25 August 2021, within 162 days of the policy commencement date, i.e., 16 March 2021. Under Clause 8(G) of Part C of the policy, no benefit is payable if any stage of cancer is diagnosed within 180 days of policy issuance.
LIC produced the Ultrasound Scan Report (Ex.R1(b)), Histopathology Report (Ex.R1(c)), and MRI Report (Ex.R1(d)), all dated between 25 August and 1 September 2021, showing impressions of Endometrial Malignancy and Carcinoma Endometrium. It argued that these constituted a valid medical diagnosis by registered medical practitioners and fulfilled the definition of “diagnosis” under Clause 13 of Part B of the policy.
LIC further contended that the later histopathology report (Ex.R1(f)) dated 28 September 2021 was only a confirmatory finding, not the first instance of diagnosis. Therefore, the claim was contractually barred.
LIC also alleged suppression of material fact, stating that the insured had denied any family history of cancer in her proposal form, despite the discharge summary (Ex.R1(e)) mentioning that her mother had carcinoma of the breast. This, it claimed, constituted a breach of the duty of disclosure under insurance law.
Respondent’s Arguments
The insured’s counsel maintained that the first diagnosis of cancer occurred only on 28 September 2021, when the histopathological biopsy report confirmed Endometrioid Carcinoma (FIGO Grade II). Until that date, no conclusive medical opinion existed, and all earlier tests merely indicated “suspected malignancy.”
The respondent contended that under Clause 13 of the policy, diagnosis must be certified by a medical practitioner after confirming the disease, which in this case happened only after biopsy. Therefore, the diagnosis date fell outside the 180-day waiting period, entitling her to coverage.
Regarding suppression of material fact, she asserted that her mother’s cancer was diagnosed over 30 years ago, when her mother was about 74 years old, far beyond the age of 60 prescribed for mandatory disclosure under the policy. Hence, no deliberate concealment had occurred.
The respondent argued that the Single Judge rightly relied upon the oncologist’s certificate (Ext.P4), which expressly stated that the diagnosis date was 28 September 2021.
Analysis of the Law
The Court closely examined the policy’s definition of “diagnosis” and the waiting period clause. Under Clause 13 of Part B, “date of diagnosis” refers to the date when a medical practitioner first examines and certifies the disease. Clause 8(G) of Part C provides a 180-day waiting period, and if “any stage of cancer” is diagnosed during that period, the policy terminates automatically, and no claim is payable.
The Court referred to Taber’s Cyclopedic Medical Dictionary, which defines “diagnosis” as the determination of a disease based on clinical or scientific evaluation. It concluded that once a physician identifies cancer through imaging or pathological signs, a diagnosis exists—even if subsequent reports confirm it.
Thus, the earlier reports from 25 August to 1 September 2021, which mentioned “Endometrial Malignancy,” constituted the first diagnosis under the policy. The later biopsy report was only confirmatory, and not a fresh diagnosis.
Precedent Analysis
- LIC v. Asha Goel (2001) 2 SCC 160 – The Supreme Court held that contracts of insurance must be strictly construed, and policy terms cannot be stretched to grant ex gratia benefits.
- United India Insurance Co. v. Harchand Rai Chandan Lal (2004) 8 SCC 644 – The Court reiterated that insurance contracts are commercial in nature, and liability cannot be extended by inference or equitable considerations.
- General Assurance Society v. Chandmull Jain (1966) 3 SCR 500 – Insurance terms are binding as written; ambiguity is resolved only when wording is unclear.
- P.C. Chacko v. LIC (2008) 1 SCC 321 – Affirmed that insurance claims must be adjudicated strictly in accordance with policy conditions, and courts cannot substitute their own view of fairness.
Applying these rulings, the Bench observed that policy conditions regarding waiting periods are explicit and binding, and courts cannot modify them on sympathetic grounds.
Court’s Reasoning
The Division Bench disagreed with the Single Judge’s interpretation of the diagnosis date. It held that the Ultrasound, MRI, and preliminary histopathology reports clearly established that the insured’s cancer had been diagnosed on 25 August 2021, within the waiting period.
The Court reasoned:
“The final pathology report dated 28 September 2021 is merely a confirmation of the earlier findings of carcinoma. The diagnosis of cancer was within the 180-day waiting period.”
Regarding suppression, the Bench noted that while the discharge summary mentioned that the insured’s mother had carcinoma of the breast, no evidence was produced to show her age at the time of illness. Since the mother’s cancer occurred decades earlier, the insured was not bound to disclose it. The Court therefore upheld the Single Judge’s finding that no material suppression occurred, but held that this did not affect the outcome of the claim.
Conclusion
The High Court allowed LIC’s appeal and set aside the Single Judge’s order, dismissing the writ petition filed by the insured. It held that the insured’s cancer diagnosis occurred within the waiting period, disqualifying her from coverage under the policy.
The Court concluded:
“The learned Single Judge failed to appreciate that the diagnosis of cancer occurred within the 180-day waiting period from the policy’s commencement. Consequently, the insured is not entitled to the policy benefit.”
Implications
This ruling reaffirms the principle that insurance contracts must be strictly interpreted, and no benefit can be extended beyond the written terms. It underscores that the date of diagnosis, not biopsy confirmation, governs eligibility under waiting period clauses.
The judgment also clarifies that family medical history disclosure must relate to relevant time frames specified in the policy and cannot be invoked retrospectively. The decision will guide future adjudications involving health insurance waiting periods and diagnostic confirmation timelines, balancing fairness with contractual certainty.
FAQs
1. Does a biopsy confirmation count as the first diagnosis under insurance policy terms?
No. The Court held that once medical reports or imaging indicate malignancy, that constitutes the first diagnosis. A later biopsy only confirms the existing diagnosis.
2. Can suppression of an old family illness invalidate a claim?
Not necessarily. Non-disclosure must relate to material facts and relevant timelines defined by the policy. Old illnesses beyond the policy disclosure limit are not material.
3. What happens if cancer is diagnosed within the waiting period?
If any stage of cancer is diagnosed within the waiting period (180 days in this case), the policy automatically terminates, and no claim is payable.
