Punjab consumer commission orders LIC to pay accident benefit on murdered policyholder

The Punjab State Consumer Disputes Redressal Commission has ordered Life Insurance Corporation of India (LIC) to pay the double accident benefit on four policies of a policyholder who was murdered in Moga. In a decision dated 13 October 2026, the commission held that LIC's refusal amounted to deficiency in service. It ordered 6% interest and Rs 50,000 in costs, payable within 60 days.

What Happened

The policyholder held four LIC policies with a double accident benefit, an extra payout if death is accidental. According to the order, he was killed by unidentified persons at his shop in Moga on 14 July 2020. LIC paid the basic death benefit but refused the extra benefit in April 2021.

LIC's stand, per the order, was that social media material and a police closure report showed the killing was pre-planned by a gang to create terror, so the death was not accidental. The family had sought Rs 26,60,000 as the remaining benefit. The District Commission at Moga dismissed their complaint, and they appealed.

The State Commission held that the police record pointed to the gang's aim of creating terror, and that LIC had not shown the policyholder had any role in the incident. It held that a social media post relied on by LIC had not been proved and had no evidentiary value. It said a pre-planned crime does not automatically take a death outside the policy, especially when LIC had placed no exclusion clause on record. It also noted LIC's own 2007 circular, which says an accident benefit claim should not be withheld when a policyholder is murdered and police records raise no suspicion against the claimant.

The commission directed LIC to pay the double accident benefit under all four policies, with 6% annual interest from 30 April 2021, to the three family members in equal shares, plus Rs 50,000.

What It Means

Families whose accident benefit claim is refused because a death was a murder can point to this reasoning: per this order, the insurer must show the death falls outside the policy terms. The order is the commission's finding and may be appealed. Consumers with an insurance complaint can contact the National Consumer Helpline on 1915 or file through e-Daakhil.

Source: Consumer commission order