An Indian insurance company has failed to overturn an order directing it to pay ₹14.73 lakh to a widow after rejecting her late husband’s life insurance claim over alleged concealment of pre-existing medical conditions. The Punjab State Consumer Commission upheld the original ruling, including directions to pay annual interest of 6 per cent, compensation of ₹10,000 and litigation costs of ₹5,000.
According to a report published by The Indian Express on 14 October, the dispute arose after Mamta Gupta sought insurance benefits following the death of her husband, Arun Gupta. The insurer refused to settle the claim, alleging that he had failed to disclose a history of diabetes, high blood pressure and kidney disease when purchasing the policy. However, the company could not provide sufficient medical documentation to substantiate its allegations.
Arun Gupta purchased a group credit life insurance policy on 31 July 2019, paying a premium of ₹23,765. The policy was due to expire on 30 July 2022. However, he died on 24 January 2021, with cardiac and respiratory arrest accompanied by shock recorded as the cause of death. Mamta Gupta, the policy’s nominated beneficiary, subsequently submitted a claim for the insurance proceeds.
On 28 April 2021, the insurer rejected her claim. It argued that Arun Gupta had answered questions about his medical history in the negative on the insurance application. The company also cited an investigation which allegedly indicated that he had been admitted to the Postgraduate Institute of Medical Education and Research (PGIMER) in Chandigarh in June 2017 for treatment of chronic kidney disease.
Despite these allegations, the insurer failed to produce the necessary hospital records to support the investigator’s findings. The consumer commission found no reliable medical documents, prescriptions, diagnostic reports or treatment histories establishing that Arun Gupta had suffered from the alleged conditions before taking out the policy. There was also insufficient evidence to demonstrate that he had knowingly concealed relevant information about his health.
The commission observed that an investigator’s statements alone cannot establish a policyholder’s previous medical history or prove deliberate non-disclosure. Medical records created after an insurance policy begins may refer to a particular illness, but such references do not automatically establish that the condition existed before the policy was purchased. Nor do they necessarily prove that the insured person knew about the condition at the time of application.
The ruling also addressed the insurer’s reliance on the alleged presence of diabetes and hypertension. Although these conditions can be associated with cardiovascular and kidney complications, their alleged existence alone does not necessarily justify rejecting a life insurance claim following a death. The circumstances of the individual case and the supporting medical evidence must be considered. The commission also took account of previous consumer forum decisions and a ruling by the Supreme Court of India.
The dispute had previously been decided in Mamta Gupta’s favour by the District Consumer Commission in Jalandhar on 17 July 2023. The district commission directed the insurer to pay ₹14.73 lakh, together with annual interest at 6 per cent from the date of the claim until payment. It also ordered the company to provide ₹10,000 in compensation and ₹5,000 towards litigation expenses.
The insurance company challenged that decision before the Punjab State Consumer Commission. However, the state commission upheld the district commission’s directions, leaving the insurer liable for the principal claim and the additional amounts specified in the original order.
The proceedings also covered the return of the premium. The insurer had previously refunded ₹23,765 and attempted to treat the payment as a final settlement. Under the district commission’s directions, Mamta Gupta must return the premium if she has already received it. The order also provides for the release to her of ₹8.64 lakh deposited by the insurer during the appeal proceedings, along with the interest accrued on that amount, in accordance with the commission’s directions.
The case highlights the importance of evidence in disputes involving alleged non-disclosure of pre-existing illnesses. Insurance applicants are expected to provide accurate information about their medical history when completing policy applications. Insurers, in turn, must assess claims fairly and support allegations of concealment with credible evidence.
Rejecting a life insurance claim can have serious financial consequences for a bereaved family, particularly when the policy is intended to provide financial protection following the death of a family member. Consumer commissions play an important role in examining whether insurers have applied policy conditions appropriately and whether their decisions are supported by the available evidence.
In Mamta Gupta’s case, the commission’s decision reinforces the principle that an allegation of concealed illness is not, by itself, sufficient grounds to withhold insurance benefits. An insurer must establish the relevant facts with reliable documentation, including evidence that the alleged condition existed before the policy was taken out and that the policyholder knowingly withheld material information. The ruling preserves the widow’s right to the compensation ordered by the district commission and underscores the importance of accountability in insurance claim settlements.