Bank refunded insurance premium after borrower's death, then rejected claim; consumer commission grants relief
- Posted on July 21, 2026
- By The Times of India
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- 1 min read
In brief
A consumer court in Jammu and Kashmir has established a significant precedent protecting insurance beneficiaries' rights. The ruling determines that financial institutions cannot retroactively cancel loan-linked insurance coverage by reversing premiums following a borrower's death. The district commission found both the bank and insurance provider guilty of service failures and deceptive practices, mandating full payment of benefits to the deceased's family members.
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Bank refunded insurance premium after borrower's death, then rejected claim; consumer commission grants relief
NEW DELHI: A district consumer commission in Jammu and Kashmir has ruled that a bank cannot deny loan-linked insurance benefits to a deceased borrower's family by simply reversing the premium after his death. In its July 16 order the commission held Jammu and Kashmir Bank and PNB MetLife India Insurance jointly liable for deficiency in service and unfair trade practice, and directed them to pay the insurance amount.
