A man in Kerala recently won a consumer case against a life insurance company after a district forum ruled that the insurer failed to provide the policy handbook containing terms and conditions before he bought the plan, according to the court order obtained by The Indian Express.
The Thiruvananthapuram District Consumer Disputes Redressal Commission ordered the company to refund Rs 2.74 lakh, plus Rs 10,000 as compensation and Rs 3,000 towards litigation costs—totalling nearly Rs 2.8 lakh.
The case details also highlight that insurance buyers have the right to know all policy terms before paying any amount.
Policy bought in 2022, handbook came months later
In 2022, the complainant said the company representatives approached him and persuaded him to take a policy in favour of his daughter. He paid the first annual premium of Rs 3,09,145 (including GST) on February 22, 2022.
He told the commission that although he had asked for the policy handbook containing the terms and conditions, it was handed over to him only three months after he paid the premium. He argued that the key terms governing the policy were never communicated to him in advance, so he could not make a fully informed decision.
Stroke, medical bills and request to exit the policy
Soon after buying the policy, the man suffered a stroke. He said it left him with difficulty in walking, speaking and understanding, along with paralysis or numbness in his face, arm and leg. As the sole earning member of his family, he found himself unable to continue paying premiums while facing heavy expenses for medical treatment, surgery and ongoing medication.
Given his health condition and financial pressure, he requested the insurer to discontinue the policy and refund the premium already paid, The Indian Express news report added. The company, however, reportedly replied that there was no provision for refund if the policy was surrendered at that stage. Aggrieved, he approached the consumer forum, represented by advocates Ajitha VK Nair and Sachin VL.
Special case with peculiar circumstances
The three-member bench—President PV Jayarajan and members Preetha G Nair and Viju VR—called the matter “a special case with peculiar circumstances”, different from routine cases where claims are rejected based on policy terms.
The commission wrote in its August 20 order, “There is no proof before this commission to show that the handbook containing the terms and conditions of the policy was handed over to the complainant before the acceptance of the proposal form of the complainant.”
It also noted that the complainant had earlier raised the same grievance about non-issuance of the handbook before the insurance ombudsman. The insurer, though it appeared through counsel after receiving notice, did not file a written version responding to the allegations.
Refund ordered, but some costs allowed to insurer
Even while holding the insurer deficient in service and guilty of unfair trade practice, the commission recognised that the company had incurred certain expenses while issuing the policy, such as the Goods and Services Tax (GST), documentation charges and agent commission. On that basis, it allowed the insurer to retain Rs 35,000 from the total premium paid.
Balancing the equities, the forum directed the insurer to:
Refund Rs 2.74 lakh to the complainant
Pay Rs 10,000 as compensation for mental agony and financial loss
Pay Rs 3,000 as the cost of proceedings
All amounts were to be paid within 30 days, jointly and severally by the concerned officials of the insurance company.
Why this order matters for policy buyers
The ruling underlines a clear duty on insurers as they must provide the policy handbook with full terms and conditions before the proposal form is accepted. Only then can a customer decide whether the product suits their needs, risks and ability to pay over time.
Because the terms were not clearly explained upfront, the buyer could not understand whether he could afford the long-term premiums, what would happen if he had to exit early due to illness or loss of income, or what the guaranteed income benefits actually covered. By penalising the insurer, the commission reinforced that selling a policy without giving key documents in time is an unfair trade practice.
How consumers can seek help?
For similar grievances, consumers can:
Contact their state consumer helpline (in Kerala: 1800-425-1550)
Call the National Consumer Helpline at 1915
Approach the Insurance Ombudsman for faster resolution of insurance disputes
File a complaint before the appropriate District/State Consumer Commission under the Consumer Protection Act