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SBI Life Must Pay Rs 50 Lakh for Rejected Claim, Rules Commission
8 Oct
Summary
- Consumer commission orders SBI Life to pay 50 lakh to widow and family.
- Claim rejection based on old medical records deemed unsustainable by court.
- Insurer must prove policyholder knew of illness and deliberately concealed it.
A Chandigarh consumer commission has mandated SBI Life Insurance to disburse Rs 50 lakh to the heirs of a chartered accountant, overturning the initial rejection of his life insurance claim. The insurer had denied the Rs 50 lakh payout, citing alleged non-disclosure of illness based on medical records dating back to 2014 and a 2019 ultrasound. The commission found these grounds insufficient, stating that the insurer must demonstrate the policyholder's awareness of a material condition and intentional concealment at the time of policy purchase.
The deceased, Raj Kumar, purchased a policy in March 2019 and passed away in October 2020. SBI Life's repudiation in March 2021 was based on a 2014 diagnosis of acute pancreatitis and delirium tremens, and a December 2019 record of a cirrhotic liver. The commission emphasized that a significant time gap existed between the old hospitalization and policy inception, with no proof of continuity of illness. Furthermore, the later cirrhosis finding lacked evidence linking it to chronic alcoholism or policyholder knowledge at the time of application.
The commission further noted that the insurer conducted no medical examination prior to issuing the policy. Consequently, SBI Life was ordered to pay the Rs 50 lakh sum assured, plus 9% annual interest from October 24, 2020, and Rs 75,000 for mental agony and litigation expenses. The insurer has 30 days to comply, with escalating interest penalties for delays.
