District consumer commission orders LIC to pay ₹80 lakh to student whose father died in car accident

District consumer commission orders Life Insurance Corporation to pay ₹80 lakh to student whose father died in car accident, after initially denying claim due to undisclosed policy.

The District Consumer Commission ordered the Life Insurance Corporation (LIC) to pay ₹80 lakh to a student whose father passed away in a car accident. The insurance company had initially denied the claim, stating that victim had not disclosed about having more than one policy with them.

The District Consumer Disputes Redressal Commission-III, Hyderabad was dealing with a complaint by Surya Snehit (21). The opposite parties (OP) were the Zonal Manager, South Central Zone Office, LIC, the Manager of LIC’s Nizamabad Branch, and the Divisional Manager of LIC’s Secunderabad Divison Office.

The complainant’s father, K. Prabhakar Rao, died in a road accident and his body was found in a canal in Thoguta, Telangana. The complainant stated that the victim had taken a Jeevan Amar policy of a sum insured of ₹ 80 lakh from LIC. The victim had other policies as well. The complainant’s sister was the nominee of two other policies, also from LIC, which were settled. However, the complainant’s claim was repudiated with the OP stating that the victim had not disclosed that he had another policy, bought in 2019, with the SBI.

For their part, the OP maintained that policy was repudiated by LIC’s Divisional Office, Secunderabad. The policy had not run the course of a three-year period, which led to the claim being scrutinised under Section 45 of the Insurance Laws (Amendment) Act, 2015. The OP stated that during scrutiny of the policy taken in 2019, it was found that the victim had stated that no other policy was bought in his name. They alleged that he had suppressed facts which led to them to reject the claim.

Taking the evidence and arguments placed on record, the Commission stated that the policy in question was taken before the victim bought the SBI policy. The complainant did not mention this because it does not attract Section 45 of the Insurance Laws (Amendment) Act.

Stating the a repudiation of the claim amounts to deficiency in service, the Commission stated that complainant is entitled to receive the sum insured of ₹80 lakh and other benefits at an interest of 9% per annum. Compensation of ₹25,000 and costs of ₹5,000 were imposed.