A district consumer forum in Andhra Pradesh has ordered SBI Life Insurance to pay nearly Rs 41 lakh in insurance proceeds and damages to the widow of a motorcycle accident victim, dismissing the company’s defense that the policyholder had concealed pre-existing health conditions.
The Kakinada District Consumer Dispute Redressal Commission ruled that the insurer failed to demonstrate that the late policyholder intentionally concealed medical information to warrant canceling the coverage. The bench awarded the complainant a net insurance settlement of Rs 39.87 lakh alongside 9 percent interest calculated from October 31, 2025, after adjusting for unpaid policy premiums. The commission also instructed the insurer to pay an additional Rs 1.05 lakh to cover litigation expenses and compensate for the mental distress and harassment caused to the claimant.
Accidental Death and Claim Rejection
The dispute stems from a life insurance policy purchased by Komara Nanaji Rao on October 23, 2024. Rao had enrolled in SBI Life’s eShield Insta Plan A Policy, which provided a sum assured of Rs 40 lakh, with premiums deducted directly from his bank savings account and his wife designated as the nominee.
Three months later, on the night of January 27, 2025, Rao was riding a motorcycle toward the coastal destination of Uppada in Kakinada district when he fell into canal waters near Narrow Bridge at Suryaraopeta in Kakinada Rural Mandal. Searchers retrieved his body the following day.
Following an investigation, Thimmapuram Police Station registered a First Information Report. A post-mortem examination performed by the Department of Forensic Medicine and Toxicology at Rangaraya Medical College established the cause of death as asphyxia resulting from drowning, an outcome further corroborated by a positive diatom test from a chemical examiner. Law enforcement officials subsequently closed the case after concluding that no foul play was involved.
After Rao’s widow submitted the required claim documentation, SBI Life Insurance Co. Ltd. repudiated the payout through a formal communication on October 30, 2025, and returned the premium payment of Rs 6,898.
Insurer’s Allegations of Non-Disclosure
In rejecting the claim, the insurer argued that Rao had breached the doctrine of utmost good faith during the application process. SBI Life stated that Rao had answered negatively when asked whether he had a history of hypertension, elevated blood sugar, or diabetes mellitus.
According to the insurer, subsequent scrutiny of Rao’s medical history uncovered hospital files, prescriptions, and diagnostic reports indicating that he had received medical care for diabetes and high blood pressure prior to applying for the policy. The company maintained that it would have declined the insurance proposal had those medical records been disclosed at the outset.
The widow challenged the denial before the consumer commission, describing the repudiation as an arbitrary deficiency of service and an unfair trade practice. She argued that her husband died in an unforeseen accident that bore no connection to the alleged medical issues.
Commission Rejects Insurer’s Defense
The three-member commission, comprising President Raghupathy Vasantha Kumar along with members Chakka Susi and Chaganti Nageswara Rao, ruled in favor of the widow, finding that she had presented consistent proof that her husband died from accidental drowning.
The panel held that simply presenting past prescriptions or records indicating recovery from elevated blood pressure or glucose levels does not sufficiently establish a deliberate attempt by a policyholder to make false declarations or hide material facts.
Observing that the arbitrary denial subjected the claimant to avoidable hardship, harassment, and emotional distress, the bench determined that the widow had fully established her right to the policy benefits and directed SBI Life to fulfill the financial award.
