The National Consumer Disputes Redressal Commission ( NCDRC) has ruled that an insurance company can’t deny paying the insurance claim even if the policy holder dies within 90 days from taking a policy. It ordered an insurance company to pay Rs 2.5 lakh with 9% interest to the kin of a deceased who had died on the 90th day of the purchase of a policy.
The case refers to one Kulwinder Singh of Punjab, who had paid Rs 45,999 to HDFC Standard Life Insurance on May 26, 2010. He passed away due to a heart attack on August 25 that year. When the family sought the full assured amount, the insurance firm paid them only the premium Singh had paid.
While directing the insurance firm to pay the full assured amount, the single-member bench of M Shreesha also referred to an order from the insurance regulator IRDA on June 27, 2012 involving the same insurance company. Based on the order, NCDRC upheld that the insurance companies cannot apply the 90-day waiting period and reject claims. The IRDA had ordered Rs 1 crore penalty on the same insurance company for rejecting 21 claims citing the same 90 days waiting period. The NCDRC also observed, “Even in the instant case, the deferred period was 90 days and it is not as if the time of death was planned only to take advantage under the policy expecting that the insured may not live beyond the period of 90 days.”
Singh’s family submitted how the deceased had paid the premium in cash on May 26, 2010, but the policy became effective from May 29. Singh’s family pleaded that since the premium was paid in cash, so the risk cover begins from that date.
