The Himachal Pradesh State Consumer Disputes Redressal Commission has directed SBI Life Insurance Company Limited to disburse Rs 49.98 lakh to the nominee of a deceased policyholder, ruling that repudiating a Rs 50 lakh death claim over a single missed premium during a fatal medical emergency constitutes unfair trade practice and deficiency in service.
Modifying an earlier order passed by the District Consumer Commission, Chamba, the state panel partially allowed an appeal by the insurer, directing SBI Life to pay Asha Devi Rs 49,97,983.46. The final sum reflects the total Rs 50 lakh coverage minus Rs 2,016.54 for an unpaid May 2022 premium. The tribunal also ordered 9 percent annual interest on the amount from April 27, 2023, the date the complaint was filed, while upholding orders for Rs 50,000 in compensation and Rs 15,000 toward litigation expenses.
The matter stems from an SBI Life E-Shield policy secured by Rajinder Singh in 2019 with a coverage period extending from June 20, 2019, to June 20, 2041. His wife, Asha Devi, was registered as the nominee.
According to case records, Singh experienced a sudden medical emergency in mid-May 2022 and was diagnosed with acute jaundice accompanied by thrombocytopenia on May 19. He underwent continuous hospitalization across medical centres in Chowari and Tanda before dying on June 23 at Dr. Rajendra Prasad Government Medical College in Tanda.
SBI Life rejected Devi’s claim following her husband’s death, arguing that the policy had lapsed prior to his passing because the monthly installment due on May 20, 2022, was not settled within the standard 15-day grace period. Devi maintained that her husband had consistently honored his financial commitments and that severe health complications prevented the timely deposit.
A bench comprising Commission President Justice Inder Singh Mehta and member Yogita Dutta noted that Singh had deposited his April 2022 premium on May 19, 2022, which the insurer accepted right before his health deteriorated.
Upon examining the insured’s payment history, the commission found that SBI Life had repeatedly accepted delayed premium payments beyond the 15-day grace period without penalty or objection throughout the policy term.
The panel concluded that Singh’s failure to pay the May premium was neither intentional nor willful, arising entirely from sudden critical illness and continuous hospitalization. Highlighting that no notice regarding the unpaid premium was issued to Singh during his lifetime, the bench stated that insurance terms must be interpreted fairly. Repudiating a claim over a single missed installment after establishing a history of accepting late payments amounted to service deficiency and unfair conduct by the insurer.
