Claim settlement if a non-smoker becomes smoker after taking the policy

POSTED BY Prasoon ON April 26, 2012 10:42 am COMMENTS (7)

Let’s consider this case. A person is a non-smoker, declares it in term insurance application, gets blood/urine test done and receives the policy. Now after three years, he starts smoking and dies after one year of that. What will happen to the claim?

Or let’s say, he doesn’t become a regular smoker/drinker but just takes a small glass of wine in a party, suffers an accident on the same day and dies. What will happen to the claim?

I understand that if claim is within two years, then the insurer will try it’s best to reject this claim. But what if it happens after four years? Can insurer prove that policyholder was a smoker/drinker even at the time of taking that policy? Can insurer still prove that it was a suppressed fact or fraudulent statement?

7 replies on this article “Claim settlement if a non-smoker becomes smoker after taking the policy”

  1. Prasoon says:

    All my below questions are based on assumption that policy is more than two/three years old.

    1. So, what should be general practice for non-smoker turned smokers? Does he need to declare to insurer about the same? I couldn’t find this clause in my LIC/HDFC policy wordings/documents.

    2. Now, if one declares about the habit change, what could be possible/general after-effects?
    a. Policy continues as usual
    b. Policy continues after medical examination
    c. Policy continues and premium gets increased
    d. Insurer cancels the policy

    3. PM says that person was smoker/alcoholic at the time of death. Person had not declared it at the time of taking the policy. Reason of death was not related to cig/alcohol. Can insurer still deny the claim?

  2. It is generally a good practice to take the medicals when taking an insurance policy. If for low coverage amounts the insurer does not do a medical test just avoid the plan. Pay a few thousands more and get a coverage only after medicals.

    If a medical test was taken and the company has not detected Nicotine levels at the time of issuance of the policy there is absolutely less chance they can deny the claim saying the user was a smoker and did not disclose the fact. It simply means the Insurance company has not done the due diligence when issuing the policy (assuming the person was really a smoker). Their argument will not hold in a court of law. But be prepared for some legal tussle if someone starts smoking after the policy is taken AND AND AND death is caused by this habit.

  3. Prasoon says:

    Dear Ashal, Thanks.

    If onus lies on family then it’ll be really difficult.

    My questions –

    1) If family proves somehow that it was started only after taking the policy, will claim be honoured? Insurer can’t deny for anything which started after taking the policy, right? As we don’t need to mention any change in location/salary/health/job position after taking the policy, similarly we don’t need to mention about this habit as well – unless it’s mentioned in the policy document, right?

    2) Why does the onus lie on family to prove? Why doesn’t it lie on the insurer to prove that consumption was started before taking the policy?

    3) in some of the countries if it gets out that person was smoker while in proposal form it was mentioned non-smoker – claim gets honoured based on smoker value. I guess, in India it’s not like that. In my opinion –
    If an insurer feels – had the person declared a particular thing, company had not issued the policy – then only claim should be rejected. Otherwise claim value should be re-calculated and be honoured.
    Yes, I know that it doesn’t work like this here. And there are many words like ‘trust’ and ‘contract’ – it was just my personal opinion 🙂

    1. Dear Prasoon, Let me clarify. After the death, the claim was filed by the family & as discussed above, the insurer denied the claim on the basis of alcohol intake. Now as the claim has been denied, the family has to prove that drinking was started after taking the policy or that was just the first time that the deceased took alcohol & the very same day/night met with that accident & died.

      In simple words, family ‘ll come into fight only after the claim is rejected.



  4. Ram Mohan says:

    quite interesting and valid question. Does it depend on the policy wording? Or are you supposed to inform the insurance company that you’ve now started smoking or drinking?? All very vague to me

    Regarding your second question that the person takes a glass of wine and dies due to an accident. As long as he was not driving, I think it should be fine. But then again insurance companies are a pain in the wrong place. If the driver was drunk, they may reject the claim. So my advice — don’t drink and drive. And don’t get into a vehicle where you know the driver is drunk and if he/she is known person, stop them and get a taxi/auto


    1. Prasoon says:

      Not fully convinced with your answer of second question.

      What if person was just crossing the road and some vehicle hits him. Had he been in his full sense, he could have noticed the vehicle earlier. And thus, could have avoided the accident.

      So according to insurer – main cause of his death was wine, and the person had not disclosed it. While in reality, at the time of taking that policy he was not a drinker and so did not mention.

      1. Dear Prasoon, Let me try it – The person in question was non smoker/drinker at the time of purchasing policy (Please do note if the person is an occasional one, please write the same in the proposal form itself to avoid future problems) but later on started the same. After 4-5 years of policy, if the death happens in the accident, a police case ‘ll be registered & the PM of the bodies ‘ll be carried out. If the PM report indicates the alcohol intake, Insurer may try to deny the claim. On the part of family of the deceased, onus lies on family to prove that alcohol consumption was started only after taking the policy.

        If the same person was driving the vehicle under the influence of Alcohol, the claim ‘ll be denied for legal terms as it’s prohibited by Law.



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