While dismissing a revision petition filed by the Life Insurance Corporation of India (LIC), the national consumer disputes redressal commission (NCDRC) has upheld concurrent findings that the insurer wrongly repudiated death claims under five life insurance policies on allegations of suppression of medical history.
In a detailed order pronounced on 1 January 2026, the apex consumer forum affirmed earlier rulings of the Andhra Pradesh state consumer disputes redressal commission and the Chittoor district consumer forum, directing LIC to pay the full sum assured of ₹10 lakh along with interest and compensation to the nominee.
In an order earlier this month, the NCDRC bench of air vice-marshal (AVM) J Rajendra (retd) and justice Anoop Kumar Mendiratta, says, “...the district forum and the state commission, upon detailed appreciation of the evidence, have concurrently held that the insurer failed to establish that the insured had knowledge of any pre-existing disease or that there was deliberate and material suppression at the time of submitting the proposal form by leading credible evidence. The medical records relied upon by LIC, though indicative of illness at a later stage, were found insufficient by the fora below to prove conscious suppression of material facts as on the date of the proposal. These are findings of fact based on evidence on record."
"...we hold that the insurer failed to establish any material suppression or misrepresentation on the part of the deceased life assured so as to justify repudiation of the death claim. The concurrent findings recorded by the district forum and affirmed by the state commission are based on proper appreciation of evidence and do not suffer from any illegality, perversity, or material irregularity. The revision petition No176 of 2020 is accordingly dismissed," the order says.
The dispute arose from five life insurance policies, each valued at ₹2 lakh, taken by Dharmendra Reddy in August 2009 from LIC’s Palamaner branch in Andhra Pradesh. The policies were issued between 20th August and 28 August 2009. At the time, Mr Reddy nominated his minor son, M Charan Reddy, as the beneficiary, with the child’s mother recorded as guardian.
On 20 December 2010, Mr Reddy died. According to Charan Reddy, all five policies were in force on the date of death. While LIC settled claims under certain other policies taken by the father, it repudiated the claims under these five policies in March 2011.
LIC cited two grounds for repudiation – alleged suppression of material facts regarding Mr Reddy's health and the 'premature' nature of the claim. The insurer maintained that he was a chronic alcoholic suffering from liver-related ailments, including alcoholic hepatitis and pancreatitis, prior to taking the policies.
Charan Reddy’s mother initially challenged the repudiation before LIC’s internal appellate mechanisms, including the zonal and central offices. After those efforts failed, the matter was taken to the insurance ombudsman which rejected the claim in January 2015.
Following this, Charan Reddy approached the district consumer disputes redressal forum at Chittoor, alleging deficiency in service and arbitrary repudiation of a valid death claim.
In its order dated 3 August 2016, the district forum partly allowed the complaint and directed LIC to pay the entire sum assured of ₹10 lakh, along with interest at 9% from the date of repudiation. It also awarded ₹50,000 as compensation for mental agony and ₹2,000 as litigation costs.
LIC’s appeal against this order was dismissed by the Andhra Pradesh state commission in October 2019, prompting the insurer to approach NCDRC through a revision petition.
Before NCDRC, LIC argued that both lower fora had committed serious errors by ignoring what it described as 'overwhelming evidence' of material suppression by Mr Reddy, the deceased. The insurer relied on medical records from NIMHANS at Bengaluru, Christian Medical College at Vellore and St John’s Medical College Hospital at Bengaluru, to assert that the insured had undergone treatment for alcohol dependence and liver disease well before the policies were issued.
LIC contended that the insured had answered 'No' to health-related questions in the proposal forms, amounting to misrepresentation. It argued that insurance contracts are contracts of utmost good faith, and any concealment of material facts entitles the insurer to repudiate the claim.
The insurer further claimed that the state commission wrongly observed that the declaration columns in the proposal forms were blank and failed to appreciate the evidentiary value of medical records indicating long-standing illness.
However, NCDRC agreed with the findings of both the district forum and the state commission that LIC failed to discharge its burden of proving suppression of material facts.
A key factor in the case was the proposal forms themselves. The state commission had noted that while the forms were in English, the declaration columns, which are critical to bind the proposer to the information provided, were left blank in all five policies. Despite this, LIC issued the policies without ensuring compliance with regulatory requirements.
“In the absence of declaration in the proposal forms, the opposite parties (LIC) are debarred from taking the plea of suppression of material facts,” the state commission had observed, a finding endorsed by NCDRC.
The consumer fora also expressed serious reservations about the medical evidence produced by LIC. The medical attendant’s certificate from Christian Medical College contained glaring inconsistencies regarding dates of consultation and even the date of death, rendering it unreliable.
Similarly, the outpatient card from NIMHANS was a photocopy, unsupported by any affidavit from the issuing authority or treating doctor. LIC failed to explain how the document was obtained or to examine any medical professional to establish its authenticity.
The discharge summary from St John’s Medical College Hospital, meanwhile, related to treatment after the issuance of the policies and could not, by itself, establish that the insured knowingly suppressed a pre-existing disease at the proposal stage.
NCDRC noted that merely producing medical documents was insufficient. The insurer was required to show that the insured was aware of the alleged illness and deliberately concealed it while filling out the proposal forms — a burden LIC failed to meet.
The commission also underlined the limited scope of its revisional jurisdiction under Section 21(b) of the Consumer Protection Act, 1986. Citing Supreme Court precedents, NCDRC reiterated that it cannot re-appreciate evidence or interfere with concurrent findings of fact unless there is perversity, jurisdictional error, or material irregularity.
In this case, the findings of deficiency in service are based on a detailed appreciation of evidence and did not suffer from any legal infirmity, the commission held.
Dismissing LIC’s revision petition, NCDRC held that the insurer failed to establish any material suppression or misrepresentation on the part of the deceased life assured that would justify repudiation of the death claim.
“The concurrent findings recorded by the district forum and affirmed by the state commission do not suffer from any illegality, perversity, or material irregularity,” the commission ruled, adding that the repudiation of the claim amounted to deficiency in service.
The ruling, once again, reinforces the principle that while insurance contracts are based on utmost good faith, the onus lies squarely on insurers to prove deliberate suppression of material facts. It also serves as a reminder to insurers to ensure strict compliance with proposal and underwriting procedures, as lapses at the issuance stage can weaken repudiation decisions years later.
For policy-holders and nominees, the decision underscores the consumer fora’s willingness to scrutinise repudiations closely, particularly in death claim cases where insurers rely on posthumous medical records without clear proof of intentional concealment.
