The Madhya Pradesh State Consumer Commission has directed the Life Insurance Corporation of India (LIC) to pay a widow ₹3 lakh after rejecting her late husband’s insurance claim on the grounds that he had allegedly concealed diabetes and hypertension.
The case involved two LIC policies with a combined sum assured of ₹3 lakh, purchased by the deceased in 2006 and 2008. Both policies had subsequently lapsed and were revived on December 14, 2010. After his death in March 2012, his widow sought the insurance benefits, but LIC rejected the claim in January 2014, alleging non-disclosure of medical conditions.
LIC relied on declarations of good health submitted during the policy revival process and a medical certificate stating that the policyholder had suffered from Type II diabetes and hypertension. However, the commission found serious discrepancies in the documentation.
In particular, the declarations relied upon by LIC carried dates of December 10 and December 14, 2012, several months after the policyholder’s death on March 18, 2012. The consumer ombudsman had earlier flagged the discrepancy and recorded concerns regarding the documents.
The commission also found that the medical certificate did not adequately establish the duration of the alleged illnesses. LIC failed to produce additional medical records, prescriptions or treatment documents proving that the policyholder had the conditions and had deliberately concealed them when the policies were revived.
The State Commission therefore dismissed LIC’s appeal and upheld the district consumer commission’s direction to pay the ₹3 lakh claim, along with applicable bonuses and 7% annual interest from January 16, 2014, the date on which the claim was repudiated. The district commission had also awarded ₹5,000 compensation and ₹1,500 litigation costs.
The case highlights the importance of documentary evidence in life insurance claim repudiation. An allegation of medical non-disclosure needs to be supported by reliable evidence establishing both the existence of the condition and the policyholder’s knowledge and concealment of the material fact.
Want to deepen your expertise beyond today’s news?
Explore practical certification courses designed for banking, risk, insurance, compliance, ESG, AI, and emerging technologies professionals.
Learn from industry experts and earn certifications from RMAI and BFSI Sector Skill Council of India.
#Insurancenews
