The District Consumer Disputes Redressal Commission in Hisar has ruled in favor of a claimant, directing PNB MetLife India Insurance Company Limited to pay Rs 10 lakh with 9% annual interest. The claimant, Raj Kumar, had filed claims under two life insurance policies held by his brother, Bajrang Singh, who passed away on October 24, 2020, due to heart failure. While the insurance company paid out the claim for the first policy, they denied the claim for the second policy, citing alleged concealment of medical history and an earlier declined policy with a premium refund.
However, the Commission found that PNB MetLife failed to provide evidence that Bajrang Singh had concealed any medical information or that he was ever informed of the policy cancellation and premium refund. As a result, the Commission has not only ordered the payment of the claim amount with interest but also directed the insurance company to pay an additional Rs 25,000 as compensation for the distress caused and Rs 10,000 towards litigation costs.
The order was passed by Commission President Jagdeep Singh along with members Rajni Goyat and Amita Aggarwal. This decision underscores the importance of insurance companies maintaining transparent and clear communication with policyholders, especially in matters concerning policy cancellations and claims. It also highlights the role of consumer protection bodies in ensuring that insurance firms adhere to fair practices and do not unjustly deny claims to beneficiaries.
The case serves as a significant precedent, emphasizing that insurance companies must provide substantial evidence to support their claims of policyholder misconduct, such as concealment of medical history. In the absence of such evidence, denying claims can be deemed unjust and may result in legal repercussions, including the payment of compensation and litigation costs as seen in this instance. The ruling is a victory for consumer rights, reinforcing the principle that insurance companies should act in good faith and prioritize transparency and fairness in their dealings with policyholders.