A consumer disputes commission in Visakhapatnam has ordered HDFC Life Insurance to disburse over Rs 50 lakh to a man whose wife died of a heart attack merely five days after purchasing a life insurance policy.
The May 30 ruling mandates the insurer to pay a Rs 50 lakh death benefit to 53-year-old Savara Bhaskar, plus six percent annual interest calculated from the date of his wife’s death on March 15, 2025. The panel also directed HDFC Life to pay Rs 25,000 for mental agony and Rs 5,000 for litigation costs, finding the company guilty of a deficiency in service for terminating the policy without proof of wrongdoing.
Claim Denied Over Alleged Misrepresentation
The dispute stemmed from an HDFC Life Smart Protect Plan acquired by the deceased, Savara Radha, on March 10, 2025. She paid an annual premium of Rs 50,000 to initiate the coverage. Following her fatal heart attack at home five days later, Bhaskar filed for the death benefit as her designated nominee.
Instead of processing the payout, HDFC Life rejected the claim and issued a policy discontinuance notice on April 10, 2025.
Representing the insurer, advocate K Rama Kireeti argued before the commission that Radha had provided false profile information on her application. The company maintained that this alleged failure to disclose material facts violated the principle of utmost good faith. HDFC Life claimed this breach allowed them to void the contract during the initial early review period without accruing liability to the husband.
Lack Of Evidence Leads To Insurer Liability
The consumer forum, overseen by President Dr Gudla Tanuja and member Varri Krishna Murthy, rejected the insurance company’s defense. The panel determined that HDFC Life failed to submit any tangible evidence demonstrating that the application contained inaccurate information.
According to the ruling, an insurance provider cannot accept premium payments to initiate coverage and subsequently rely on exclusionary clauses to avoid liability without substantiating its claims. The commission concluded that terminating the policy after the insured event without justifiable grounds constituted an unfair trade practice.
While addressing the issue of fraudulent insurance claims draining public funds, the consumer forum noted that handling such broad industry matters falls outside its jurisdiction under the Consumer Protection Act. The complainant was represented in the proceedings by advocate D Subrahmanyam.
