Importance of Disclosure of Smoking Habits to Insurance Company

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Ramesh was a regular smoker. He concealed his smoking habit from his insurance company and bought a health insurance policy with a lower premium. He was happy that he was able to buy an insurance policy with a lower premium and higher benefits. Later he was diagnosed with tuberculosis. He took treatment and informed his insurance company about the same. The company investigated his case and rejected his claim. The company denied the claim as they found out about his smoking habits. In the claim rejection letter, they stated that the claim was rejected due to the non-disclosure of smoking habits. Ramesh felt dejected as his claim was rejected. He felt guilty for not revealing his smoking habits during the issuance of the policy.

Just to save some premium, he lost the claim money.

On the other hand, at the time of issuance of an insurance policy, Manoj revealed to his insurance company that he was a smoker but has given up smoking. He also mentioned that he has finished attending his smoking cessation programs. As he disclosed his past smoking habit and the fact that he has quit smoking, the company did not set a higher premium. Later, he had a stroke and was hospitalized. His family notified the insurance company about his hospitalization and asked for a claim. The company approved the claim amount after investigating his case. Manoj was able to get the claim money.

Why Should a Customer Disclose His Smoking Habits?

Also Read: Leveraging IRDAI's Grievance Redressal Mechanism: Your Rights as a Consumer

The insurance contract works on the principle of utmost good faith. It is the responsibility of the insurer and insured to disclose all the material facts at the time of the purchase.

Concealing a fact can lead to a claim rejection. It can also be considered fraud in insurance.

If you smoke, inform your insurance company. Tell them honestly, how often you smoke. Hiding it, will not help you, as medical tests (blood and urine test) at the time of claim can detect it very easily.

Thus, it is important to honestly disclose your smoking habits in the proposal form. If you have given up smoking, then also reveal it. As a higher premium is better than large medical bills.

It is better to disclose your smoking habit in the beginning than to regret it later. Also please check that your disclosure has been notified in the policy document.

However, if you have revealed your smoking habit at the time of purchasing the policy and at the time of claim, it gets rejected on the grounds of non-disclosure of smoking habits, then contact your insurance company and reapply for the claim.

If you need help in resolving your genuine case, then you can approach Insurance Samadhan. We have helped 14,500+ people in resolving complaints related to insurance. Contact us to get samadhan for your insurance-related issues. We are always available to help you out.