Archive · 20 Jul 2026
LIC Ordered to Pay Rs 4 Lakh Claim
A woman named Kakarla Peeramma had two insurance policies with LIC.
After she passed away, LIC paid one claim but refused the other, saying she didn't tell them about her dwarfism and another policy.
The court said LIC was wrong because dwarfism is obvious and the other policy was already known to LIC.
The court ordered LIC to pay the Rs 4 lakh claim with extra money for interest and compensation.
LIC has to follow this order within 45 days.
LIC was ordered to pay a Rs 4 lakh insurance claim to the nominee of a deceased policyholder.
The claim was initially repudiated by LIC alleging concealment of physical disability and non-disclosure of an earlier policy.
The Commission held that dwarfism was apparent and LIC failed to establish a connection between the alleged non-disclosure and the policyholder's death.
LIC was directed to pay the insured amount with 9% annual interest from January 28, 2021, until realization, along with Rs 10,000 as compensation.
The Commission rejected LIC’s plea to recover the amount paid under the earlier policy, stating it would require separate legal proceedings.
- Who
- Kakarla Peeramma (deceased policyholder) and Shaik Basha alias Nagarjuna (nominee)
- What
- Life Insurance Corporation of India (LIC) ordered to pay Rs 4 lakh insurance claim with interest and compensation
- When
- Policyholder died in November 2018; Commission's order issued recently
- Where
- District Consumer Disputes Redressal Commission, SPSR Nellore, Andhra Pradesh
- Why
- LIC wrongly repudiated the claim, and the Commission held that the repudiation amounted to deficiency in service
LIC's Stance
Consumer Commission's Stance
Claim Repudiation
LIC's Stance
LIC repudiated the claim alleging concealment of physical disability and non-disclosure of an earlier policy.
Consumer Commission's Stance
The Commission held that dwarfism was apparent and LIC failed to establish a connection between the alleged non-disclosure and the policyholder's death.
- Policyholder
- Kakarla Peeramma
- Nominee
- Shaik Basha alias Nagarjuna
- Claim Amount
- Rs 4 lakh
- Compensation
- Rs 10,000
- Interest Rate
- 9% annual
- Compliance Period
- 45 days