Woman died 8 days after buying insurance policy, family wins Rs 20.25 lakh

A consumer commission in Andhra Pradesh granted relief to the husband and three sons of a woman who died in December 2022, just eight days after obtaining an insurance policy from Tata AIA Life Insurance Company, holding that the insurer failed to prove that she had concealed any pre-existing disease and directing it to pay Rs 20.25 lakh to the family.

President D Sreedevi, with members Y Sundara Rao and Dr S A Sameera, was hearing a complaint filed by the woman’s husband and three sons seeking the insurance amount of Rs 20 lakh from Tata AIA Life Insurance Company Limited, along with other reliefs.

“The opposite parties (TATA AIA Life Insurance Company) have failed to prove non-disclosure or the existence of any pre-existing disease. Accordingly, the repudiation of the claim was unjustified. The complainants have thereby suffered financial loss and mental anguish as a result of the conduct of the opposite parties,” the July 3 order read.

Death 8 days after buying policy

The complainant claimed that his wife procured an insurance policy from the Tata AIA Life Insurance Co. Ltd for a sum assured of Rs 20 lakh during her lifetime.

It was added that the premium of Rs. 3,122 was paid on December 1, 2022, and the policy coverage was effective from December 1, 2022, to December 1, 2023.

It was claimed that his wife appointed him as nominee, and the insurance company issued the certificate of insurance on December 1, 2022.

It was added that before issuing the policy, the company’s officials investigated the health of the life assured and, being satisfied, granted the policy.

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However, the wife of the complainant died suddenly on December 9, 2022, well within the policy period due to a heart stroke. It was alleged that at the time of issuance, she was 34 years old, in good health and not on any medication.

The husband claimed that she had never suffered from any serious illness. Subsequently, the husband, as nominee, lodged a claim for the sum assured and submitted all required documents. The husband and the woman’s sons were represented by advocate B V Siva Rama Krishna.

However, on August 21, 2023, the insurer repudiated the claim, alleging that the deceased had suffered a heart attack within eight days of policy inception and had failed to disclose a history of chest pain in the proposal form. The complainants denied any suppression of material facts and challenged the repudiation.

‘No authentic lab report’

The commission found that the insurer had relied primarily on a laboratory report and outpatient records that were not properly authenticated.

The consumer body held that the same do not conclusively establish that the medical records pertain to the complainant’s wife.

It was further found that there was nothing in those records to show that she was suffering from anaemia or that she had undergone any treatment as an inpatient.

It was noted that the insurance company failed to prove that the woman had a pre-existing condition of anaemia before the policy inception.

The commission ordered that the assured sum of Rs 20 lakh should be distributed equally among the four complainants, each receiving one-fourth share of Rs 5 lakh.

The commission further directed that since three of the sons are minors, their respective shares of Rs 5 lakh should be deposited in fixed deposit receipts in the name of each minor, with the father as guardian, until each minor attains majority.

The commission directed the TATA AIA to pay Rs 20,000 compensation for deficiency of service and mental agony, along with Rs 5,000 for litigation expenses to the father.

Tata AIA’s defence

The Tata AIA, represented by advocate Kareti Srinivasulu, denied all allegations made by the complainant. It was argued that the husband filed a claim form stating the cause of death as a heart stroke on December 9, 2022, and submitted it to the insurance company on February 8, 2023.

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It was submitted that because the death occurred within eight days of policy issuance, the insurance company investigated the claim, which revealed that the complainant’s wife had concealed facts about her health at the time of taking the policy.

It was further argued that the complainant’s wife fraudulently obtained the policy by concealing a pre-existing disease at the time of signing and submitting the proposal. It was alleged that the woman was anaemic and her haemoglobin level was below the minimum required, which was not disclosed in the proposal form.

The company argued that, based on the non-disclosure of those facts at the time of availing the policy, the claim was repudiated.

For consumer-related grievances, individuals may contact the consumer helpline in their respective states (Andhra Pradesh helpline: 0866-2551431) or call the National Consumer Helpline at 1915 for assistance.