Don't take sick leave on false grounds :: Business Line

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If one is to go by the number of medical certificates submitted to employers and illnesses confirmed through those certificates, the natural conclusion would be that India has an unhealthy work force which suffers from serious illnesses!

A medical certificate confirming an illness would force the employer to grant leave of absence to an employee whose leave application could have met with rejection otherwise.

In many companies ‘earned leave', ‘privilege leave', can be encashed during service and at the time of retirement. So workers prefer to avail of ‘sick leave' or ‘medical leave', which are not eligible for encashment.

We are, here, concerned with the effect of leave (on medical grounds) on one's life insurance policies. Insurance is a contract of good faith.

In such contracts, two persons enter into the contract with each believing the disclosures made by the other and with the faith that the other person has made a full disclosure.

If at any time it is found that there was no full disclosure or there was suppression of material facts the insurer can repudiate the contract.

SUPPRESSION OF FACTS

This repudiation can be done if it is proved that there was a non-disclosure or suppression of material fact, that the suppression was deliberate, and that the party knew at the time of making the statement that it was false, and if it is found that the suppression has affected the insurer's underwriting decision.

Early claims (by death), from date of commencement or from date of revival, are investigated by life insurance companies.

Let us examine a commonly seen case.

Mr A purchased a life insurance policy on, say, January 1, 2010. In the previous year, Mr A had availed of 30 days leave on medical grounds for supporting his daughter for her preparation for CAT. The year before, Mr A had availed 21 days sick leave submitting medical certificates. This was for undertaking an all-India tour organised by the Railways.

CLAIM INVESTIGATION

In January 2011, Mr A died of some illness. Obviously it was an early death claim.

On the strength of the declaration given in the proposal form authorising employers, doctors and hospitals to give relevant details pertaining to him (the policyholder) to the life insurance company, the insurer, as part of the investigation, requested the employer to supply the leave records of Mr A for the last three or five years.

The leave- records showed that Mr A was absent from duty on health grounds – “not in good health”- for 21 days in 2008 and 30 days in 2009 – and was under the treatment of Government doctors/hospitals.

But he had not disclosed this in the proposal form against the question, “Have you suffered from any illness requiring absence from duty for more than one week?” The obvious decision of the insurer would be to repudiate the claim. The false documents created by Mr A speak against him, to his disadvantage.

THE REMEDY

One can disclose to the insurer that the medical certificate was false and only for the purpose of availing leave. But then the veracity of other answers in the proposal form also comes under the cloud of suspicion.

The best step is not to avail leave of absence on false grounds.

If leave was availed on health grounds, then it must be disclosed in the proposal form. By disclosing an illness suffered, life insurance cover may not be refused. A few clarifications may be asked for, a medical examination may be suggested by the insurer or consideration of the proposal may be postponed for some time.

( The author is President, Society for Promotion of Legal and Insurance Awareness. )