The National Consumer Disputes Redressal Commission has ordered Life Insurance Corporation (LIC) to pay ₹61.5 lakh in life insurance proceeds to a Mumbai woman following a 12-year legal dispute. According to reports from The Times of India, the commission ruled in favor of the family on all five policies, establishing that an insurer cannot deny a death claim for non-disclosure of a medical condition if the policyholder himself was unaware of the disease when the policy was taken.
The dispute dates back to June 2010 when Nitin Suresh Gambhir submitted proposals to LIC for five life insurance policies with respective sums assured of ₹10 lakh, ₹15 lakh, ₹15 lakh, and ₹10 lakh each. As reported by The Times of India, three policies commenced on 26 August 2010 with risk beginning on the same date, while the other two policies carried ₹10 lakh each. The family paid the first premium on 7 September 2010, but LIC maintained it received the premium only on 13 September 2010, treating that date as the commencement of risk.
According to the court findings reported by The Times of India, Nitin was admitted to P.D. Hinduja National Hospital on 11 September 2010 due to an unhealed wound on his right leg. Medical records described him as a known diabetic for two months, taking hypoglycaemic agents, and he was discharged on 13 September 2010. The commission noted that LIC failed to produce medical records establishing Nitin was aware of his diabetes before signing the proposal form on 27 June 2010, and a February 2013 medical record described him as non-diabetic, further weakening LIC's non-disclosure argument.
The key issue centered on the actual date LIC received the first premium for the final two policies. As reported by The Times of India, LIC relied on First Premium Receipts dated 13 September 2010, but the commission considered more reliable Proposal Deposit Receipts dated 7 September 2010, which specifically recorded ₹40,100 received as premium in each case. The commission concluded that LIC received the first premium on 7 September 2010, four days before Nitin's hospitalisation, and since the first premium was received before his hospitalisation, Nitin was not required to disclose any adverse health changes for any of the five policies.
According to The Times of India, LIC has been ordered to pay ₹60 lakh towards the sum assured under all five policies, including ₹10 lakh under each of three policies and ₹15 lakh under each of the remaining two. The commission upheld the ₹1 lakh compensation awarded by the state commission for mental agony and fixed total litigation costs at ₹50,000. Interest will be payable at 9% per annum on all amounts from the date LIC repudiated the claims in July 2014 until full payment is made.
