Insurance: Woman dies 8 days after taking out insurance; family moves court and secures a claim worth lakhs

Life Insurance Claim: A woman passed away just eight days after purchasing a life insurance policy. Although the insurance company initially refused to settle the claim, a court ruling eventually awarded the family a payout of ₹20.25 lakh.

Life Insurance Claim: Can an insurance company refuse to pay a claim if the policyholder dies shortly after purchasing the policy? If you have ever wondered about this, you should definitely read this report. A case came to light involving a woman who passed away just eight days after her policy commenced. The insurance company subsequently rejected the claim. The matter reached the Consumer Commission, which ruled in favor of the family, ordering the insurance company to pay ₹20.25 lakh.

What is the full story?

The woman had purchased a life insurance policy and paid the premium. However, she passed away merely eight days after the policy came into effect. Her family filed a claim, but the company refused payment, alleging that essential health-related information had been withheld at the time of purchase. During the hearing, the Consumer Commission found that the insurance company failed to present sufficient evidence to substantiate its allegations. The Commission stated that a claim cannot be rejected based on mere suspicion; once a policy has been issued, the company must provide concrete proof to justify a rejection.

How much did the family receive?

The Commission directed the insurance company to pay the sum assured of ₹20 lakh, along with interest and other associated amounts, totaling approximately ₹20.25 lakh. It also stipulated that additional interest would be payable if the payment was not made within the specified timeframe. Thus, if an insurance company rejects a claim without a valid reason in a case involving someone you know, the policyholder or their family can approach the Consumer Commission. If the claim is found to be legitimate, the court can order the insurance company to make the payment.