Insurer Cannot Reject Claim for Hiding Other Policies

Direct answer: No, not by itself. A life insurer cannot repudiate your death claim only because the deceased did not disclose other existing life insurance policies. The Supreme Court held in 2025 that the mere existence of other policies is not a material fact, so this ground alone cannot defeat a genuine claim.

When a family loses a breadwinner and then the insurer rejects the claim, the shock is real and the loss is financial. A very common rejection ground is that the deceased “suppressed material facts” by not listing other policies held with other insurers. After the Supreme Court ruling in Mahaveer Sharma v. Exide Life Insurance Company Limited & Anr., 2025 INSC 268, that single ground no longer holds up. This guide explains why other policies are not a material fact, and the exact steps to fight a wrongful repudiation through the Insurance Ombudsman and the consumer commission.

Boxed case study. Mahaveer Sharma v. Exide Life Insurance Company Limited & Anr., 2025 INSC 268, Supreme Court of India, decided February 2025, by Justices B.V. Nagarathna and Satish Chandra Sharma.

• The policy: The insured (the appellant's father) took a term life policy for ₹25,00,000 in June 2014.
• The death: He died in an accident in August 2015, well within the policy term.
• The rejection: Exide Life repudiated the claim, saying the proposer had not disclosed three other life policies held with the Life Insurance Corporation of India. He had disclosed one Aviva policy in the proposal form.
• The fight: The consumer forums sided with the insurer. The family appealed all the way to the Supreme Court.
• The ruling: The Court set aside the repudiation. It held that failure to mention other policies does not amount to non-disclosure of a material fact in relation to the policy being taken. Applying the “prudent insurer” test, the Court said the omission would not have changed a prudent insurer's decision to grant cover, especially since a significant policy had already been disclosed.
• The relief: The Court directed the insurer to release all policy benefits with 9% interest per annum from the date the claim fell due until payment.

This is now binding law across India. An insurer that repudiates a life claim only on the “other policies not disclosed” ground is acting against a clear Supreme Court precedent.

A material fact is information that, if known, would influence a prudent insurer's decision on whether to grant the policy and on what terms. Health conditions, age, habits like smoking, and occupation are usually material because they directly affect mortality risk.

The mere number of other life policies a person holds is different. It does not, on its own, change the risk of death. That is why the Supreme Court treats it as not material unless there is some specific, deliberate fraud connected to it. A genuine omission of other policies, by itself, is not a valid reason to deny a death claim.

Note on health insurance: This article is about life insurance and undisclosed other policies. Rejection of a health claim for non-disclosure of a pre-existing disease is a separate question with its own rules. See our guide on health claim rejection for pre-existing disease for that situation.

If your life claim was rejected only because other policies were not disclosed, work through these steps in order.

1. Get the rejection in writing. Ask the insurer for the repudiation letter stating the exact ground and the clause relied on. A verbal “no” is not enough to act on.
2. Send a written representation. Reply to the insurer citing Mahaveer Sharma v. Exide Life, 2025 INSC 268, and ask them to review and pay. Keep it short, factual and dated.
3. File a complaint with the insurer's grievance cell. Every insurer has a Grievance Redressal Officer. Give them 15 days (or up to one month) to resolve it.
4. Approach the Insurance Ombudsman. If unresolved or rejected, complain free of cost to the Insurance Ombudsman under the Insurance Ombudsman Rules, 2017. The Ombudsman can hear personal-line disputes up to ₹50,00,000. File within one year of the insurer's final reply.
5. File before the Consumer Commission. Repudiation of a valid claim is “deficiency in service” under the Consumer Protection Act, 2019. File before the District, State or National Commission depending on the claim value. You can also use an RTI to a public insurer like LIC to obtain claim-processing records.
6. Keep every document. Proposal form, policy bond, premium receipts, death certificate, the repudiation letter and all correspondence form your evidence.

For a deeper civic toolkit, see The RTI Playbook.

• Original policy document and the signed proposal form.
• Premium payment receipts proving the policy was in force.
• Death certificate of the insured.
• The insurer's written repudiation letter.
• Nominee's identity and bank details.
• Copies of all emails and letters exchanged.

If the insurer is a public authority such as the Life Insurance Corporation of India, you can file an RTI to obtain the claim file, the internal note recording the rejection reason, and the underwriting record. This often exposes that the only ground was “other policies not disclosed”, which the Supreme Court has now rejected. Use our AI RTI Drafter to prepare the application, the PIO Reply Checker to test the reply, and the First Appeal Builder if you are stonewalled. Private insurers are not covered by RTI, but the Ombudsman and consumer routes still apply fully.

• Accepting a verbal rejection. Always insist on the written repudiation letter with the exact clause.
• Missing the Ombudsman deadline. Complain within one year of the insurer's final reply.
• Confusing this with a health claim. A pre-existing disease in a health policy is a different issue from undisclosed other life policies.
• Not citing the precedent. Naming 2025 INSC 268 in your representation puts the insurer on notice that the law is against them.
• Treating consumer-forum loss as final. As Mahaveer Sharma shows, higher courts can and do overturn wrong repudiations.

Not on that ground alone. The Supreme Court held in Mahaveer Sharma v. Exide Life, 2025 INSC 268, that the existence of other life policies is not a material fact, so it cannot by itself justify repudiation of a genuine death claim.

A material fact is information that would influence a prudent insurer's decision to grant cover or set its terms, such as serious illness, age or risky occupation. The number of other policies a person holds does not, by itself, change the mortality risk and is not treated as material.

First to the insurer's grievance cell, then free of cost to the Insurance Ombudsman within one year of the final reply, and also before the District, State or National Consumer Commission under the Consumer Protection Act, 2019, depending on the claim amount.

Yes. A Supreme Court judgment binds all insurers, public and private. The Ombudsman and consumer-commission routes are available against private insurers, while RTI works only against public authorities like LIC.

In Mahaveer Sharma the Supreme Court awarded 9% per annum from the date the claim fell due until payment. Consumer forums and the Ombudsman often award similar interest where an insurer has wrongly delayed or rejected a valid claim.

• Mahaveer Sharma v. Exide Life Insurance Company Limited & Anr., 2025 INSC 268 (Supreme Court of India), reported as [2025] 2 S.C.R. 1311.
• Insurance Ombudsman Rules, 2017; Council for Insurance Ombudsmen, cioins.co.in.
• Consumer Protection Act, 2019 (deficiency in service).
• Insurance Regulatory and Development Authority of India, irdai.gov.in.

This guide is general information, not legal advice. For your specific claim, consult a qualified advocate. Reviewed by Dr. Shrawan Kumar Pathak.