Settle ₹1 Cr insurance claim along with 7% interest: Hyderabad consumer panel directs HDFC Life Insurance
The panel said the claim rejection was unjustified and amounted to a deficiency in service.
By - Sistla Dakshina Murthy
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Hyderabad: The Hyderabad District Consumer Disputes Redressal Commission–II has directed HDFC Life Insurance Company to settle a Rs 1 crore life insurance claim along with 7 per cent annual interest.
The panel said the claim rejection was unjustified and amounted to a deficiency in service.
Claim rejection held arbitrary
The case relates to Kondapalli Sitarama Rao, who had purchased a Rs 1 crore life insurance policy from HDFC Life on September 9, 2021, and paid the first monthly premium of Rs 2,977.
The due date for the next premium was October 8, 2021. However, Rao died of a heart attack on October 7, a day before the grace period expired.
Nominee’s claim rejected
After his death, the nominee and wife, Sita Madhavi, approached the insurance company with all the required documents seeking settlement of the claim. The insurer rejected the claim, stating that the policy had lapsed and was not in force at the time of the policyholder’s death.
Insurer’s stand not backed by evidence
The insurance company claimed that the policyholder himself had sought cancellation of the policy and that the premium amount had been refunded. However, during the proceedings, the company failed to produce any documentary evidence to support its contention.
Commission finds policy valid
The Commission took note of the policy number issued by the insurer and condolence messages sent to the family after the policyholder’s death. Based on these records, the Bench held that the policy had been duly issued and was valid on the date of death.
Deficiency in service established
The Bench, comprising Commission President Narsimha Rao and members D. Sridevi and V. Janardhan Reddy, observed that the insurer neither proved cancellation of the policy nor provided a written explanation justifying the rejection of the claim. This, the Commission ruled, amounted to clear deficiency in service.
₹1 Crore payout with interest ordered
Directing the insurer to honour the policy, the Commission ordered payment of the assured sum of Rs 1 crore to the nominee along with 7 per cent interest. The insurer was also directed to pay Rs 20,000 towards litigation costs.
The ruling underscores the obligation of insurance companies to act fairly and transparently, particularly in matters involving death claims, and reinforces consumer rights against arbitrary claim rejections.
