HYDERABAD: The district consumer disputes redressal commission-1, Hyderabad, has directed PNB MetLife Insurance Company Limited to pay Rs 75 lakh to the widow and two minor daughters of a deceased policyholder, ruling that the insurer had wrongly rejected their life insurance claim without sufficient evidence.
The complaint was filed by Myadam Adilaxmi on behalf of herself and her two daughters after the death of her husband, Myadam Balaji, who had purchased a Rs 75 lakh life insurance policy through PolicyBazaar in December 2021. Issued by PNB MetLife for a 27-year term, the policy had been serviced with regular premium payments. According to the complaint, Balaji, the family’s sole breadwinner, died of severe chest pain on May 3, 2024. He was rushed to Yashoda Hospital in Hyderabad, where he was declared dead.
Adilaxmi’s claim was rejected by PNB MetLife in August 2024 because Balaji had not disclosed a history of pneumonia and a positive RT-PCR test before purchasing the policy. The insurer alleged suppression of material facts, while Adilaxmi contended that he had only mild Covid-19 symptoms in 2020, recovered without hospitalisation and that his death was unrelated.
The commission found that the insurer had produced no medical evidence to prove Balaji had undergone treatment for pneumonia before taking the policy or had concealed any serious illness. It also found no link between the alleged non-disclosure and his death, and noted that the insurer had failed to file its written version within the prescribed period.
Citing Supreme Court and National Consumer Commission judgments, the commission reiterated that the burden of proving suppression of material facts rests with the insurer. It held that an insurance claim cannot be rejected based on an unrelated or unsubstantiated pre-existing medical condition, adding that a positive RT-PCR test alone could not justify repudiating a insurance claim.
Allowing the complaint, the commission directed PNB MetLife to pay the insured sum of Rs 75 lakh with 7.5% annual interest from the date of repudiation, Rs 1 lakh as compensation for mental agony and Rs 20,000 towards litigation costs, while permitting adjustment of any refunded premium. The complaint against PolicyBazaar was dismissed after the commission held that it had merely acted as an intermediary and was not responsible for the insurer’s decision.