SBI Life Told To Pay Rs 39.87 Lakh After Rejecting Drowning Victim’s Claim Over ‘Hidden Illness’

A life insurer cannot reject a death claim merely by producing medical records without proving that the policyholder deliberately concealed a material fact, a consumer commission has held.

The Kakinada District Consumer Disputes Redressal Commission in Andhra Pradesh directed SBI Life Insurance to pay Rs 39.87 lakh to the widow of Komara Nanaji Rao, who died after accidentally falling into a canal.

The amount carries interest at nine per cent from October 31, 2025. The insurer was also directed to pay Rs 1.05 lakh towards compensation and litigation costs.

A Bench comprising president Raghupathy Vasantha Kumar and members Chakka Susi and Chaganti Nageswara Rao said, “The complainant was consequently required to pursue the claim before this commission and has undergone avoidable mental agony, harassment and financial hardship.”

Insurer Alleged Non-Disclosure Of Diabetes And Hypertension

Rao had purchased SBI Life’s eShield Insta Plan A policy on October 23, 2024. The policy offered a sum assured of Rs 40 lakh, while his wife was named as the nominee. Its premium was deducted from his savings bank account.

On January 27, 2025, Rao was riding his motorcycle towards Uppada in Kakinada district when he fell into a canal near Narrow Bridge in Suryaraopeta. His body was recovered the following day.

The post-mortem examination conducted by the Department of Forensic Medicine and Toxicology at Rangaraya Medical College concluded that he died of asphyxia resulting from drowning. A chemical examination also returned a positive diatom test. The police found no foul play and closed the investigation.

His wife subsequently submitted a claim with the supporting documents. SBI Life, however, repudiated it on October 30, 2025, and refunded the premium amount of Rs 6,898.

The insurer alleged that Rao had answered “no” to questions concerning diabetes, elevated blood sugar and high or low blood pressure in the proposal form. It relied on prescriptions, pathology reports and hospital records to contend that he had received treatment for diabetes and hypertension before buying the policy.

SBI Life argued that the policyholder had breached the principle of utmost good faith. It maintained that it would not have accepted the proposal had his medical history been disclosed.

Medical Records Did Not Prove Deliberate Concealment

The widow contested the rejection. She pointed out that her husband had drowned and that his death had nothing to do with diabetes or hypertension. She alleged deficiency in service and unfair trade practice.

The commission found consistent evidence establishing accidental drowning. It also held that SBI Life had failed to demonstrate that Rao knowingly made a false declaration or deliberately suppressed a material fact when purchasing the policy, according to a recent report by The Indian Express.

“Mere production of medical records showing that medicines were prescribed, or that the policyholder had recovered from elevated blood sugar or blood pressure, cannot conclusively establish intentional suppression,” the consumer commission said.

The payout was calculated after deducting the unpaid premium, bringing the net policy benefit to Rs 39.87 lakh. For policyholders, the case underlines the importance of disclosing known medical conditions accurately. For insurers, it shows that repudiation must rest on clear evidence of deliberate and material non-disclosure, not simply the later discovery of old prescriptions or test reports.

FAQs

1. Can an insurer reject a death claim based only on old medical records?
No. The insurer must establish that the policyholder knowingly concealed or falsely declared a material medical condition while purchasing the policy.

2. Does the undisclosed illness need to be linked to the cause of death?
The link may be relevant, but material non-disclosure can still affect a claim. In this case, the commission found no proven concealment, while death resulted from accidental drowning.

3. What should nominees do if a death claim is unfairly rejected?
They may approach the insurer’s grievance cell, the Insurance Ombudsman, or a consumer commission with the policy, rejection letter, medical records, and death-related documents.