5 min readNew DelhiUpdated: Aug 5, 2026 05:45 PM IST
A Telangana consumer commission has held HDFC Life Insurance guilty of deficiency in service after it allegedly rejected a group life insurance claim filed by the wife of a man who died of Covid-19. The commission directed the insurer to pay Rs 75.31 lakh under the policy, along with Rs 1 lakh as compensation, holding that the mere existence of diabetes and hypertension cannot, by itself, justify repudiation of a life insurance claim.
President Mamidi Christopher, along with members S Sandhya Rani and K Venkateshwarlu, found that the policy was issued on March 30, 2021, and the complainant’s husband died within a short period on May 14, 2021, finding that the insurer failed to prove that he had deliberately or fraudulently suppressed ailments while obtaining the policy.
“A perusal of Ex.B-3 and B-4 (material placed on record) indicates that the deceased was stated to have suffered from diabetes mellitus and hypertension before the issuance of the policy. Therefore, the existence of such ailments cannot be completely ignored. However, the mere existence of diabetes or hypertension is not by itself sufficient to repudiate a life insurance claim,” the July 14 order read.
Housing loan, group policy and COVID-19
The woman claimed that her husband availed a housing loan of Rs 55 lakh from HDFC Bank on March 30, 2021, and simultaneously obtained a group life insurance policy from HDFC Life under a master policy. She stated that Rs 81,053 was deducted from the loan account towards the insurance premium.
According to the complainant, she was the nominee under the policy. Her husband died of Covid-19 on May 14, 2021, following which she informed the bank and submitted the death certificate and other claim-related documents. She also submitted the prescribed claim forms, but alleged that despite repeated requests and legal notices, the claim remained unsettled. The woman was represented by advocate K Madhu Sarma.
‘Matter remained unsettled for years’
The commission noted that despite receiving the claim documents through HDFC Bank and subsequent legal notices, HDFC Life kept the matter pending for years before ultimately rejecting the claim.
“The conduct of opposite party number 2 (insurance company) in not properly settling the claim amount and rejecting the genuine claim arbitrarily constitutes deficiency in service within the meaning of the Consumer Protection Act, 2019,” it added.
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The commission further noted that although HDFC Bank remained ex parte, the material on record did not establish any independent deficiency in service on its part. Accordingly, the complaint against the bank was dismissed.
It directed HDFC Life Insurance to pay Rs 75.31 lakh under the group life insurance policy, Rs 75,000 towards compensation for mental agony, hardship and deficiency in service, and Rs 25,000 towards litigation costs within 45 days.
HDFC Life Insurance’s defence
The life insurance company, represented by advocate A Suresh Babu, submitted that Covid-19 was not covered under the policy and that no additional premium was paid for such coverage.
It was added that the man who took insurance suppressed material facts relating to his health condition, particularly type-two diabetes mellitus and hypertension, while submitting the declaration/proposal form. According to the company, such suppression amounts to breach of the principle of utmost good faith governing contracts of insurance and therefore the claim was liable to be rejected.
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It was further added that the complaint cannot be filed now as the incident and the whole matter were related to 2021, and the complaint was filed beyond the statutory period. It was further submitted that no claim was directly submitted before the insurer and no deficiency in service can be attributed to it.
According to the lawyer, no communication evidencing submission of claim or repudiation was produced by the complainant.
Takeaway
This ruling highlighted that the insurance company cannot decline the claim, pointing out that there was suppression of ailments until it can prove the same.
For consumer-related grievances, individuals may contact the consumer helpline in their respective states and union territories (Telangana: 1800-4250-0333) or call the National Consumer Helpline at 1915 for assistance.
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