Widow Rs 49 98 Lakh Sbi Rs 50 Lakh Claim One Premium

The Himachal State Consumer Commission has directed SBI Life to pay a widow Rs 49.98 lakh after rejecting her husband’s Rs 50 lakh death claim over an unpaid Rs 2,016.54 premium. The commission directed the insurer to pay 9 per cent annual interest from April 27, 2023, plus Rs 50,000 compensation and Rs 15,000 litigation costs.

The commission president Justice Inder Singh Mehta and member Yogita Dutta were hearing SBI Life Insurance Company Limited’s appeal against an August 22, 2024 order of the District Consumer Commission, Chamba, which had allowed Asha Devi’s complaint and directed the insurer to pay Rs 50 lakh with 9 per cent annual interest, besides Rs 50,000 compensation and Rs 15,000 litigation costs.

“The repudiation of the death claim merely on the ground of non-payment of one monthly premium, despite the fact that the life assured had been critically ill and continuously hospitalised from around the due date of the premium until his death, is unjustified…The conduct of the insurance company in accepting delayed premium payments on earlier occasions, without objection or penalty, and thereafter repudiating the claim on the ground of non-payment of a single premium, amounts to deficiency in service and unfair conduct on its part,” the commission said on August 10.

Rajinder Singh, husband of Asha Devi, bought an SBI Life E-Shield policy in 2019. He fell seriously ill in May 2022, was diagnosed with acute jaundice and thrombocytopenia, and died at Dr Rajendra Prasad Government Medical College (RPGMC), Tanda, on June 23 after treatment at hospitals in Chowari and Tanda. SBI Life rejected Asha Devi’s death claim, saying the policy had lapsed as the premium due on May 20, 2022 was unpaid.

According to the commission’s findings, Singh had purchased SBI Life E-Shield Policy, which was effective from June 20, 2019 to June 20, 2041, with a sum assured of Rs 50 lakh. Asha Devi was appointed as the nominee.

The commission recorded that Singh suddenly fell seriously ill in the third week of May 2022 and was diagnosed with acute jaundice accompanied by thrombocytopenia on May 19. He remained under treatment at different hospitals at Chowari and Tanda and died at RPGMC, Tanda, on June 23.

Asha Devi alleged that her husband had regularly paid premiums and that his serious illness prevented him from depositing the relevant premium. SBI Life however, argued that the premium due on May 20, 2022 was not paid within the stipulated period or the 15-day grace period. It therefore maintained that the policy had lapsed before Singh’s death and no amount was payable.

The state commission considered Singh’s earlier premium-payment record. His premium payment certificate showed that on several occasions he had paid premiums after the 15-day grace period. The insurer had accepted those delayed payments without objection or penalty.

The commission also noted that the premium Singh deposited on May 19, 2022 related to April 2022 and had been accepted by SBI Life. Soon afterwards, he fell seriously ill and remained under treatment until his death on June 23.

In these circumstances, the commission held that the claim could not have been rejected solely because the May 2022 premium had not been deposited. It also noted that no notice regarding non-payment of that premium had been issued to Singh during his lifetime.

The commission found nothing to suggest that Singh had intentionally or wilfully defaulted. It noted that he had been paying premiums regularly since the policy began and that the default occurred when he suddenly became seriously ill and was hospitalised in a critical condition.

The commission said insurance policy terms are to be construed fairly and reasonably.

It held that rejecting the death claim merely because one monthly premium had not been paid was unjustified, given Singh’s critical illness and continuous hospitalisation.

It further held that accepting delayed premiums on earlier occasions without objection or penalty.

Subsequently rejecting the claim over a single unpaid premium amounted to deficiency in service and unfair conduct.

The commission partly allowed SBI Life’s appeal and directed it to pay Asha Devi Rs 49,97,983.46, the Rs 50 lakh sum assured after deducting Rs 2,016.54 towards the unpaid premium. It also directed SBI Life to pay 9 per cent annual interest from April 27, 2023, the date of filing of the consumer complaint. The Rs 50,000 compensation and Rs 15,000 litigation costs awarded by the district commission were upheld.

Vineet Upadhyay is an Assistant Editor with The Indian Express (Digital), where he leads specialized coverage of the Indian judicial system. Expertise Specialized Legal Authority: Vineet has spent the better part of his career analyzing the intricacies of the law. His expertise lies in "demystifying" judgments from the Supreme Court of India, various High Courts, and District Courts. His reporting covers a vast spectrum of legal issues, including: Constitutional & Civil Rights: Reporting on landmark rulings regarding privacy, equality, and state accountability. Criminal Justice & Enforcement: Detailed coverage of high-profile cases involving the Enforcement Directorate (ED), NIA, and POCSO matters. Consumer Rights & Environmental Law: Authoritative pieces on medical negligence compensation, environmental protection (such as the "living person" status of rivers), and labor rights. Over a Decade of Professional Experience: Prior to joining The Indian Express, he served as a Principal Correspondent/Legal Reporter for The Times of India and held significant roles at The New Indian Express. His tenure has seen him report from critical legal hubs, including Delhi and Uttarakhand. ... Read More