After a woman challenged the rejection of her benefits under the insurance policies of her parents, who died in an accident in 2014, a consumer commission found Life Insurance Corporation of India (LIC) liable for deficiency in service and ordered it to pay Rs 1 lakh to the woman. The daughter’s case stems from a Double Accident Benefit scheme under the insurance policies, and she claimed she was denied the payout despite receiving succession certificates in 2022.A bench of president Devendra Mohan Mathur and member Pawan Kumar Bhardwaj also ordered it to pay Rs 11,000 as compensation and litigation costs.“The complainant had to initiate legal proceedings against the opposite parties to secure her rights. During the course of these proceedings, she had to face mental and financial harassment and hardship. This clearly establishes that the opposite parties had committed deficiency in service and unfair trade practices towards the complainant,” the October 22 order held.The commission noted that upon a detailed examination of the case records, it has emerged that the complainant’s parents died in an accident on November 17, 2014. “Still, the insurance company did not pay the entire amount to the complainant,” it added.Woman’s parents died in road accidentThe complainant’s parents had purchased two life insurance policies from the LIC on May 28, 2003. On November 17, 2014, both her parents died in a road accident. Following their deaths, the complainant approached LIC to claim the insurance amount and other benefits under the policies. However, the insurance company asked her to obtain a succession certificate from a court before releasing the amount.The complainant then approached the court, where the court ordered the issuance of succession certificates in her favour for both insurance policies.After receiving the certificates and other required documents, LIC paid her Rs 75,950 under each policy on October 31, 2022. However, through a letter in November 2022, the insurer informed her that the Double Accident Benefit (DAB) was not payable, citing the claim as an overdue death claim.Story continues below this adThe complainant alleged that despite submitting all the required documents and repeatedly approaching the insurance company, LIC failed to release the additional accident benefits payable under the policies. She then filed a complaint before the commission, alleging deficiency in service and unfair trade practices.During the pendency of the complaint, LIC deposited Rs 50,000 under each policy, amounting to Rs 1 lakh, into her bank account in November 2025. However, the complainant sought interest on the delayed payment, compensation for mental harassment, and litigation expenses.Payment has already been made: LICThe LIC argued that the complainant’s case had already been resolved as the insurer had deposited Rs 50,000 under each of the two policies, amounting to Rs 1 lakh, into her bank account in November 2025.LIC submitted that the payment was made after it received and examined a copy of the consumer complaint along with the supporting documents on October 27, 2025. It contended that since the disputed amount had already been paid, no further dispute remained and the complaint should be dismissed.Story continues below this adThe insurer further argued that the payment was made during the pendency of the complaint and not before its filing. It maintained that there was no need for further proceedings in the matter.LIC failed to release accident benefitsThe commission observed that the complainant’s parents had died in a road accident on November 17, 2014, but LIC had failed to pay the entire amount due under the two insurance policies.The commission noted that the complainant had obtained succession certificates from the competent court in 2022, and submitted the necessary documents to LIC. Despite this, the insurer did not release the DAB payable under the policies.It observed that LIC had not provided any concrete reason before the commission explaining why the complainant was not paid the accident benefit in time. The commission also noted that the insurer eventually deposited Rs 50,000 under each policy on November 19, 2025, nearly seven months after the consumer complaint was filed.Story continues below this adThe commission further observed that under the Insurance Regulatory and Development Authority (IRDAI) guidelines, the complainant was entitled to interest for the delay in settling the claim. However, she had received only the principal amount of Rs 1 lakh, without any interest for the delayed payment.TakeawayThe judgment reinforced that insurance companies cannot delay payment of admissible accident benefits despite receiving all required documents. It highlights insurers’ accountability for delayed claim settlements and establishes that policyholders are entitled to interest and compensation for deficiency in service.Consumers facing similar grievances may contact the consumer helpline in their respective states (Rajasthan: 1800-180-6030) or dial the National Consumer Helpline at 1915 for assistance.