Hyderabad: In a significant ruling, the Hyderabad District Consumer Disputes Redressal Commission–II has directed HDFC Life Insurance Company Limited to pay Rs 1 crore along with 7 percent interest to the wife of a policyholder, rejecting the company’s claim denial as unjustified.
The case pertains to one Kondapalli Sitarama Rao, who had purchased a Rs 1 crore life insurance policy from HDFC Life on September 9, 2021, after paying the first monthly premium of Rs 2,977.
Tragically, he died of a heart attack on October 7, 2021. The premium payment due date was October 8, 2021, one day after his death.
Following her husband’s death, his wife, Sita Madhavi, who was named as the nominee, submitted all necessary documents and sought the insurance claim.
HDFC Life reject’s claim
However, the company rejected her request, alleging that the policy had been cancelled and was not valid at the time of death. HDFC Life further claimed that the policyholder himself had requested cancellation and that the premium had been refunded, but failed to produce any evidence to support these claims.
A bench comprising commission president Narsimha Rao and members D Sridevi and V Janardhan Reddy examined all the documents, including communication records showing the policy number and condolence messages sent by the insurer.
The Commission concluded that the policy had indeed been issued and was valid at the time of death.
Insurer failed to provide written justification: Commission
Noting the insurer’s failure to provide written justification for the claim rejection or substantive proof of cancellation, the Commission held that this amounted to a deficiency in service.
Accordingly, it directed HDFC Life to pay the insurance amount of Rs 1 crore with 7 percent annual interest from the date of claim filing, along with Rs 20,000 towards litigation costs.
