The Telangana State Consumer Disputes Redressal Commission has upheld a decision made by the Khammam District Commission, directing the Life Insurance Corporation of India (LIC) to pay Rs 2 lakh to Jillapali Durggaiah, an agricultural laborer. The case revolves around a life insurance policy taken out by Durggaiah’s wife, Satyavathi, in 2014. Although the policy lapsed after two years, it was revived in March 2017. Unfortunately, Satyavathi passed away in March 2019.
When Durggaiah filed a claim, LIC rejected it, citing that Satyavathi had concealed her history of cervical cancer. However, the Khammam District Commission ruled in favor of Durggaiah in 2021, stating that LIC’s agent had knowingly issued the policy while Satyavathi was undergoing treatment at a cancer hospital. The commission awarded Rs 8,000 as costs to Durggaiah.
LIC appealed this decision, but the State Commission, led by Meena Ramanathan and VV Seshubabu, rejected the appeal. The commission criticized LIC’s practice of selling policies to critically ill patients, stating that the insurer cannot “blow hot and cold” after knowingly issuing a policy to someone who is already ill. The State Commission allowed Durggaiah to withdraw the deposited amount with interest.
The commission’s decision emphasizes the importance of transparency and fairness in the insurance industry. By upholding the previous ruling, the State Commission has sent a strong message to insurers that they cannot take advantage of vulnerable individuals, particularly those who are critically ill. The case highlights the need for insurers to be more diligent in their underwriting processes and to avoid engaging in practices that can be detrimental to policyholders. Ultimately, the decision is a victory for Durggaiah and his family, who will now receive the compensation they are entitled to.