6 min readNew DelhiUpdated: Sep 7, 2026 03:34 PM IST
A Telangana consumer forum has directed an insurance company to refund Rs 10 lakh to a 73-year-old retired associate professor, holding that the disputed insurance policy was claimed to have been taken without her free will and informed consent. It held the bank and insurer deficient in service and guilty of unfair trade practice and awarded her an additional Rs 50,000 as compensation and Rs 10,000 as costs.
President B Uma Venkata Subba Lakshmi, along with members C Lakshmi Prasanna and B Raji Reddy of the Hyderabad District Consumer Disputes Redressal Commission, noted that the policy documents were allegedly sent to the woman’s permanent address while she was abroad, which means she lost a meaningful opportunity to exercise the free-look period, which is a 10-15 day window within which a person can cancel a new policy and get a refund.
“This commission is of the opinion that the insurance policy was not obtained with free will and informed consent; the conduct of opposite parties number 1 to 3 (bank and insurance company) amounts to deficiency of service and unfair trade practice,” the August 27 order read.
Policy document sent when she was abroad
The complainant claimed that when she visited the bank’s branch on September 4, 2023, to transfer funds to her son who resides in the USA, the bank officials introduced her to two of their agents. These agents allegedly made her believe that she was investing Rs 10 lakh in their insurance policy and assured her that she would receive a return of Rs 2.67 lakh per year after four years.
The agents also allegedly mentioned Rs 1 crore as her salary. However, the complainant claimed that she is a retired associate professor who draws a monthly pension of Rs 57,000.
The complainant alleged that she never intended to invest, but the bank officials misled her and took signatures on loan papers and immediately invested the said amount in insurance. The bank officials presented it as a one-time investment, but it was a yearly payment, she added.
She allegedly requested the bank to cancel the insurance, but the officials told her that it could be done only in September 2024. When she returned from the USA in March 2024, the bank officials allegedly told her that the policy could be cancelled in September 2025 only.
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Aggrieved, she moved the commission. The woman was represented by advocate A M Rao.
Defence by bank, insurer
The bank, through advocate Manav Gecil Thomas, submitted that it is a reputed establishment and never obtained any signatures on blank papers, while pointing out that the transaction was not between the complainant and the bank. It added that the complainant was clearly mixing the issues related to the loan and insurance, and that the insurance transaction was between the complainant and the insurance company.
The insurance company, through law firm Areness Law, submitted that the complainant accepted the policy without any objection and that it had been issued only on her request and approval. It added that the physical policy pack was dispatched and delivered to the complainant’s address on September 18, 2023. The company claimed that it had complied with all the guidelines and regulations laid down by the insurance regulator.
‘Entitled to expect honesty, transparency’
Pointing out that the complainant is a senior citizen who was entitled to expect honest, fair and transparent treatment from the bank and insurance company, the commission held that the acts of the bank and insurance company clearly disclosed the lack of transparency and unfair dealing.
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“The close connection between the loan transaction and the insurance investment raises questions regarding the genuineness of the complainant’s consent,” it added.
The policy proposal form listed both the complainant’s permanent and current addresses, but the insurance company sent the welcome letter to her permanent address, where she was not residing. The commission added that the company’s act of sending the welcome letter to the permanent address cannot be “brushed aside”.
“A statutory opportunity cannot be said to be meaningfully provided when the policy document was sent to an address where the complainant was not residing and when she was outside the country at the relevant time,” it observed.
The commission clarified that the complainant is a senior citizen and a retired person, and such a person cannot be presumed to possess knowledge of or be aware of complex insurance terms and conditions. The bank and the insurance company should have explained the relevant terms and requirements to the complainant, it added.
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Accordingly, the commission directed the insurance company to close the said insurance policy and refund an amount of Rs 10 lakh invested by the complainant from the date of policy till the date of realisation. The bank and the insurance company were also directed to jointly and severally pay compensation of Rs 50,000 and costs of Rs 10,000 to the woman.
Takeaway
This ruling highlights that banks and insurance companies must provide details of their policies and services in an honest, fair and transparent manner, particularly when dealing with senior citizens.
Aggrieved consumers may contact the consumer helpline in their respective states (Telangana: 0771-2582902) or call the National Consumer Helpline at 1915 for assistance.
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