Life Insurance Claim Rejected for Not Disclosing Other Policies?

Yes, you can fight it. If a life insurer rejected your claim only because the policyholder did not list every other policy they held, that rejection is on weak ground. The Supreme Court ruled in February 2025 that failing to mention other smaller policies is not a material fact when the person had already disclosed a substantial existing policy, so the claim cannot be repudiated for that reason alone.

Short on time? Jump to the step-by-step section and start with a written grievance to the insurer.

This is a common trap. Insurers cite “non-disclosure of material facts” to repudiate claims. But not every omission is material. The law looks at whether the missing fact would have changed a prudent insurer's decision to issue the policy.

In Mahaveer Sharma v Exide Life Insurance Company Limited (2025 INSC 268), decided on 25 February 2025, the Supreme Court held that failure to mention other policies does not amount to a material fact in relation to the policy availed, when the person has made substantial disclosure of at least one existing policy.

The Court drew a clear line between two situations:

• Partial or substantial disclosure. The insured disclosed one large policy of about ₹40 lakh but omitted some smaller policies. The claimed policy was about ₹25 lakh, and the death was accidental. A prudent insurer would not be swayed by undisclosed policies of much lesser value. So the claim could not be repudiated.
• Complete concealment. The Court distinguished its earlier decision in Rekhaben Nareshbhai Rathod, which involved complete non-disclosure of policies. That is a different and more serious case.

The takeaway: an honest, substantial disclosure is not destroyed by the omission of a few minor policies. The Court directed the insurer to release all policy benefits with interest at 9% per annum from the date the amount became due until it is paid (para 20).

Insurers often invoke “utmost good faith,” the duty of both sides to deal honestly. That duty is real. But it does not let an insurer reject an honest claim over an immaterial omission.

1. Get the rejection in writing. Ask the insurer for the repudiation letter stating the exact ground and the clause relied on. You need this to respond.
2. Check the 3-year clock. Under Section 45 of the Insurance Act 1938, a life policy cannot be questioned after 3 years from the date of commencement, except on proof of fraud. If your policy crossed 3 years, say so in your representation.
3. Send a written grievance to the insurer's grievance cell. State that omitting minor policies is not a material fact and cite Mahaveer Sharma v Exide Life Insurance (2025 INSC 268). Attach the proposal form showing your main disclosure.
4. Escalate on the Bima Bharosa portal. If the insurer does not resolve it in 15 days, register your complaint on the IRDAI Bima Bharosa portal (bimabharosa.irdai.gov.in).
5. Approach the Insurance Ombudsman. Under the Insurance Ombudsman Rules 2017, you can file with the Ombudsman for your region. It is free and does not need a lawyer.
6. Or go to the Consumer Commission. A District or State Consumer Disputes Redressal Commission is an alternative forum for deficiency in service, where you can also claim interest and costs.

You do not have to choose the Ombudsman and the Consumer Commission together. Pick the one that suits your case.

• The policy document and the original proposal or application form
• The insurer's claim rejection or repudiation letter
• The death certificate
• Your nominee or legal-heir proof
• Proof of the disclosure you did make, such as the proposal form listing your main policy
• Any premium receipts and KYC documents

To: The Grievance Redressal Officer, [Insurer name]
Subject: Repudiation of claim under policy no. [XXXX] is not sustainable

I am the nominee under the above policy. You have rejected my claim on the
ground that the life assured did not disclose certain other insurance policies.

The proposal form clearly disclosed an existing policy of about ₹[amount].
The policies you say were omitted are of much smaller value and would not have
changed a prudent insurer's decision to issue this cover.

The Supreme Court in Mahaveer Sharma v Exide Life Insurance Company Limited
(2025 INSC 268, dated 25 February 2025) held that omitting other policies is
not a material fact where substantial disclosure of one policy was made, and
the claim cannot be repudiated on that ground.

I request you to release the full benefits with interest within 15 days,
failing which I will approach the Insurance Ombudsman and the Consumer
Commission.

Name, signature, date, contact details.

For a broader toolkit on framing complaints and using your information rights, see The RTI Playbook.

Not on that ground alone, if a substantial policy was already disclosed. The Supreme Court in Mahaveer Sharma v Exide Life (2025 INSC 268) held that omitting minor policies is not a material fact when one major policy was disclosed. Complete concealment of all policies is treated differently and can be material.

A material fact is information that would influence a prudent insurer's decision to issue the policy or set its terms. A serious illness is material. The omission of a few small policies, after disclosing a large one, generally is not, because it does not change the insurer's risk.

Often, yes. Section 45 of the Insurance Act 1938 bars an insurer from questioning a life policy after 3 years from its commencement, except by proving fraud. If your policy has run past 3 years, the insurer carries a heavy burden to justify repudiation.

Either works. The Insurance Ombudsman is free, faster, and needs no lawyer, under the Insurance Ombudsman Rules 2017. A Consumer Commission can award compensation, interest, and costs for deficiency in service. Start with the insurer's grievance cell and Bima Bharosa first.

Courts and the Ombudsman can award interest for wrongful delay. In Mahaveer Sharma, the Supreme Court ordered 9% per annum from the date the amount became due until it was paid. Your exact rate depends on the facts and the forum.

The principle of materiality is similar, but health claims often turn on pre-existing disease and treatment disclosure. See the related guides below for health-specific rejections and the IRDAI complaint route.

No, not to start. You can write to the grievance cell, file on Bima Bharosa, and approach the Insurance Ombudsman yourself. A lawyer helps only if the matter goes to the Consumer Commission or court and you want representation.

• Find and read the rejection letter; note the exact ground cited.
• Pull out your proposal form and confirm what you disclosed.
• Check the policy start date against the 3-year rule.
• Draft the representation above and email it to the insurer's grievance cell.

• Supreme Court of India, Mahaveer Sharma v Exide Life Insurance Company Limited, 2025 INSC 268, judgment dated 25 February 2025: https://indiankanoon.org/doc/192395560/
• Insurance Act 1938, Section 45 (when a life policy cannot be called in question): https://www.indiacode.nic.in
• IRDAI Bima Bharosa grievance portal: https://bimabharosa.irdai.gov.in
• Insurance Ombudsman (Insurance Ombudsman Rules 2017): https://www.cioins.co.in

• Health insurance claim rejected: how to file an IRDAI complaint
• Critical illness claim rejected for non-disclosure
• Using IRDAI Bima Bharosa against insurance mis-selling
• Pre-existing disease and health claim rejection