Cover for natural death begins after the initial waiting period ends

The initial waiting period is meant to safeguard against moral hazard

The National Consumer Disputes Redressal Commission (NCDRC) ruled in a recent case (Sophia & Anr. vs State Bank of Travancore & Anr.) that the rejection of a claim in a home loan-linked insurance cover was justified because the insurer had died during the initial waiting period. However, the NCDRC also took cognisance of the 97-day delay in issuing the policy after the proposal form and premium had been submitted. Hence, it upheld the State Commission’s ruling, which enjoined the insurer to pay the loan amount already disbursed, but not the full sum insured.

 

Understanding initial waiting period

 

Some life insurance