A Kolkata District Consumer Commission has directed IndiaFirst Life Insurance to pay Rs 99.41 lakh to the son of a policyholder, plus Rs 50,000 in compensation and Rs 10,000 in litigation costs, after finding that the insurer repudiated a Rs 1 crore term death claim on grounds it did not prove. The order, reported by The Indian Express on October 2, sets out a repudiation that moved twice. The policyholder bought the term cover for a sum assured of Rs 1 crore and paid her first annual premium of Rs 58,509.12 on January 23, 2022; the policy was issued after the insurer conducted both a physical and a virtual medical examination and verified her financial documents. She was admitted to hospital on January 30, 2023 with cough, fever and breathing problems and died on February 1, 2023, the death certificate recording severe sepsis, severe pancytopenia and acute kidney failure. Her son, the nominee, claimed in March 2023. The insurer first rejected the claim on the ground that the income and occupation documents submitted with the proposal were forged or tampered with and that the claim was therefore fraudulent. It later alleged that his mother had failed to disclose pre-existing diseases, which were named on the death certificate, before taking the policy. The complainant denied both, and said the diseases developed only around the time of her final hospitalisation, and that the death fell within the grace period after the renewal premium fell due on January 24, 2023, so the policy was in force. The insurer did not appear before the commission and filed no written version, and the matter proceeded ex parte.
Context: the two grounds, and what each one required
- The forgery allegation, on which the insurer led nothing. This was the insurer's first case and it is the kind of allegation that stops a claim without any medical evidence at all: if the income documents are forged, the contract is not the insurer's problem regardless of the health history. The commission treated it as an unproved assertion, and the consequence of an unproved forgery allegation is not merely that the ground fails but that the repudiation as a whole becomes arbitrary.
- The non-disclosure ground, which fails on the same burden. The commission's reasoning is recorded directly: there is no material and no evidence to show either that the terminal ailments pre-dated the proposal or that the deceased deliberately suppressed any material fact with knowledge and intent, and the burden being on the insurer, which led no evidence, the ground fails. This is the same evidentiary gap that decided the Sri Muktsar Sahib order we reported on September 30, where LIC produced no medical record predating the policy. What distinguishes this case is that the allegation was drawn from the death certificate itself, which records what a person died of and not what they were suffering from when they signed.
- The ex parte posture, and what it added. Because the insurer chose not to contest the case, filed no written version and produced nothing, the commission drew an adverse inference and held that the policy was subsisting and in force on the date of death. That inference does the work of the missing evidence. It is the practical reason a documented response matters: the same facts, proved, might have produced a different result, and the burden never shifted to the complainant to disprove anything.
Implication: what the order changes in practice
- The two-stage repudiation is the pattern worth recognising. An insurer that rejects a claim for document irregularity and then, when that is challenged, produces a medical ground, has not developed a defence, it has assembled a second one. Each ground is independently unproved here, and the commission is explicit that the combination amounts to deficiency in service. A policyholder facing two successive reasons for the same rejection should treat the second as a signal that the first was not the real reason.
- A ground drawn from the death certificate is the weakest available and the most common. The death certificate names the terminal conditions. It does not establish when they began, and the illnesses named here were the conditions she died of within days of admission. Treating a death certificate as evidence of a pre-existing condition is a category error, and the commission rejected it because there was no pre-proposal medical evidence to support it, not because the certificate was wrong.
- The award is below the sum assured, and the reason is not in the reported order. Rs 99.41 lakh was ordered on a Rs 1 crore policy. The report does not state the calculation, and the difference should not be assumed to be either a deduction or a discount. The useful point for a reader is narrower: an award on liability is not the same as recovery of the full sum, and the line item to check on any order is what was actually directed and by whom it must be paid.
- The jurisdiction point is worth noting because it is often the reason a claim is not heard at all. The order records that where the cause of action arises within the territorial limits of the commission, the deceased being a resident of that district and the repudiation having been received there, the complaint is maintainable. A repudiation letter received where the family lives is the fact that establishes venue, which matters when a policyholder assumes a claim must be filed where the insurer is registered.
Action
If a life claim has been repudiated, ask the insurer in writing for the specific evidence behind each stated ground, and the date on which it obtained it. A ground based on pre-existing disease requires pre-underwriting records, and the Punjab and West Bengal orders both turn on the absence of them. Keep certified copies of everything submitted and a dated acknowledgement of what the insurer received. Do not accept a second ground as a refinement of the first: if the reason changes, ask what the first reason was based on. Escalate to the insurer's grievance redressal officer, then to IRDAI's Bima Bharosa portal, then to the insurance ombudsman, keeping the date of each step because each carries a clock, and file where the repudiation was received. Watch item: whether IndiaFirst Life contests the award, and whether an appellate order disturbs the reasoning about shifting grounds, since that reasoning is the part with the widest application beyond this case.
Watch item: whether insurers respond to this pattern by requiring original documents at the initial claim stage rather than investigating later. A two-stage repudiation is costly and evidentially weak, and the cheapest response to avoid it is to test the ground before rejecting, not after.