Compensation ordered: Consumer commission overrides insurance refusal

Udupi: The Consumer Commission of Udupi has directed an insurance company to provide compensation to a customer who was denied life insurance benefits.

The case involves Prashant Shetty from Kalonàdu village, who had taken out a life insurance policy worth Rs. 10 lakhs for a 12-year period on February 17, 2021. Despite paying the first installment premium of Rs. 94,701, Shetty’s widow faced obstacles in receiving the insurance payout after his untimely demise.

Prashant Shetty was admitted to KMC Hospital in Mangaluru in February 2022 due to a severe infection and tragically passed away on the 14th of the same month. However, when his widow submitted the necessary documents to claim the insurance amount, the insurance company cited undisclosed pre-existing health conditions as grounds for refusal.

Unsatisfied with this response, the deceased’s wife lodged a complaint with the Consumer Commission of Udupi, seeking rightful compensation. Commission Chairman Sunil T. and members reviewed the case documents from both the applicant and the insurance company.

Following deliberations, the commission concluded that the insurance company should have conducted a thorough health check-up before issuing the policy. Therefore, it deemed the insurer’s refusal to honor the policy on the grounds of undisclosed health issues unjustifiable.

In its verdict, the Consumer Commission of Udupi ordered the insurance company to pay Rs. 7,38,420 to the widow of the deceased. Additionally, the commission awarded Rs. 25,000 for mental anguish and Rs. 10,000 in legal costs to the applicant.