Andhra Pradesh: Consumer Commission Directs LIC To Settle Rs 4 Lakh Insurance Claim
The Commission observed that dwarfism is an apparent physical condition that could not have escaped the notice of LIC’s agent while issuing the policy: Reports
NELLORE: The District Consumer Disputes Redressal Commission, SPSR Nellore, has directed the Life Insurance Corporation of India (LIC) to pay a Rs 4 lakh insurance claim, along with 9 per cent annual interest and Rs 10,000 as compensation, to the nominee of a deceased policyholder after holding that the insurer had wrongly repudiated the claim.
The case relates to Kakarla Peeramma, who had taken two LIC policies — a Rs 2 lakh policy from the Markapur branch in December 2017 and a Rs 4 lakh policy from the Nellore branch in August 2018.
After Peeramma died of a heart attack in November 2018, LIC settled the Rs 2 lakh policy by paying about Rs 2.09 lakh to nominee Shaik Basha alias Nagarjuna. However, it rejected the Rs 4 lakh claim, alleging that the policyholder had concealed her physical disability (dwarfism) and failed to disclose the earlier LIC policy.
The Commission observed that dwarfism is an apparent physical condition that could not have escaped the notice of LIC’s agent while issuing the policy. It also held that LIC had failed to establish any connection between the alleged non-disclosure and the policyholder’s death due to a heart attack.
The Commission further observed that the earlier Rs 2 lakh policy had been issued by LIC itself and its details were available in the insurer's records. It held that this could not be cited as a valid ground for repudiating the second claim.
Rejecting LIC’s plea to recover the amount paid under the earlier policy, the Commission said such a claim would require separate legal proceedings.
Holding that the repudiation amounted to deficiency in service, the Commission directed LIC to pay the insured amount of Rs 4 lakh with 9 per cent interest from January 28, 2021, until realisation, along with ₹10,000 as compensation for mental agony. It directed the insurer to comply with the order within 45 days.
