Summary of this article
Hyderabad consumer commission ordered Rs 10 lakh insurance policy refund
Retired professor alleged insurance mis-selling during a bank branch visit
Policy delivery denied her meaningful access to the free-look period
Informed consent remains crucial when banks and insurers sell policies
A 73-year-old retired associate professor has secured relief in an insurance mis-selling dispute after a consumer commission found that the policy was not purchased with her free will and informed consent.
The Hyderabad District Consumer Disputes Redressal Commission directed the insurer to close the policy and refund the Rs 10 lakh invested by the woman. The bank and insurer were also asked to jointly pay Rs 50,000 as compensation and Rs 10,000 towards costs, according to a recent report by Financial Express.
The August 27 order was passed by Commission President B Uma Venkata Subba Lakshmi and members C Lakshmi Prasanna and B Raji Reddy.
1 August 2026
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What Happened At The Bank Branch
The woman had visited a bank branch on September 4, 2023, to transfer money to her son in the US. She alleged that bank officials introduced her to two agents who presented an insurance product as an investment.
According to her complaint, she was asked to invest Rs 10 lakh and told that the product would pay Rs 2.67 lakh annually after four years. She also claimed that the agents recorded her salary as Rs 1 crore, although she was a retired professor receiving a monthly pension of around Rs 57,000.
The woman maintained that she had not intended to buy insurance. She alleged that her signatures were obtained on papers connected with a loan and the money was subsequently placed in the policy. What was presented as a one-time investment, she said, required payments every year.
When she sought cancellation, bank officials allegedly told her that it could be done only in September 2024. After she returned from the US in March 2024, she was reportedly asked to wait until September 2025.
Bank And Insurer Denied Allegations
The bank denied taking signatures on blank papers and argued that the insurance transaction was between the customer and the insurer.
The insurer said that the policy had been issued with the woman’s approval. It maintained that the physical policy pack was delivered to her address on September 18, 2023, and that regulatory requirements had been followed.
Why The Commission Ruled In Her Favour
The Commission noted that the proposal form carried both the woman’s permanent and current addresses. However, the policy documents were sent to her permanent address while she was abroad.
This deprived her of a meaningful opportunity to examine the policy and use the free-look facility, the Commission observed. It also said that a senior citizen could not automatically be expected to understand complicated insurance terms without a proper explanation.
The Commission concluded that the bank and insurer had failed to deal with her transparently. The ruling shows that a customer’s signature may not, by itself, settle an insurance dispute. Banks and insurers must be able to demonstrate that the buyer understood the product, its payment obligations and the exit conditions before agreeing to it.
FAQs
1. What relief did the consumer commission grant the retired professor?
The insurer was directed to close the policy and refund Rs 10 lakh. The bank and insurer must also pay Rs 50,000 as compensation and Rs 10,000 as costs.
2. Why did the commission rule in her favour?
The commission found that the policy was not purchased with free will and informed consent. It also noted that she could not meaningfully use the free-look facility.
3. Does signing an insurance form prove informed consent?
Not necessarily. Banks and insurers must ensure that buyers understand the policy, recurring payment obligations, and exit terms before purchasing it.
