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Chennai: In a significant verdict that reinforces policyholders' rights, the Chennai North District Consumer Disputes Redressal Commission has directed a private insurance company to pay ₹98.28 lakh to Shwetha Pothiraj, a resident of Arumbakkam, after wrongfully denying her husband's death claim. The court termed the insurer's actions as "unfair" and imposed additional penalties of ₹25,000 as compensation and ₹5,000 for legal expenses.
Insurance Claim Denied Over Alleged Concealment of Medical History
The case pertains to a ₹1 crore life insurance policy purchased by Shwetha's husband, Siryas Pothiraj, in April 2020. Siryas, who worked as a manager in a private software company, passed away in October 2022 due to liver disease. When Shwetha filed for the insurance claim, the company rejected it, alleging that her husband had concealed pre-existing health conditions while purchasing the policy.
The insurance company maintained that since the policyholder had provided a "false guarantee" regarding his health status, they were only liable to refund the premium amount of ₹1.71 lakh, which they claimed to have already processed. However, Shwetha contested this decision, presenting medical reports from 2019 that showed no indication of liver disease. She argued that her husband had never been diagnosed with or treated for any liver condition prior to purchasing the insurance policy.
Consumer Court Slams Insurer's Baseless Allegations
The three-member bench, comprising Chairman Gopinath and members Kavita Kannan and Ramamoorthy, delivered a scathing indictment of the insurance company's practices. The commission noted that the insurer failed to produce the original guarantee form allegedly signed by the deceased policyholder, making their claims about concealment unsubstantiated.
In its ruling, the commission stated, "The insurance company's rejection of the claim is unjust and unfair." The bench ordered the insurer to pay the remaining ₹98.28 lakh of the claim amount after adjusting for the refunded premium. The additional compensation of ₹25,000 was awarded for the mental agony caused to the claimant, along with ₹5,000 to cover legal expenses.
