The District Consumer Disputes Redressal Forum has directed Life Insurance Corporation (LIC) to pay Rs 5 lakh to a resident of village Manela here after finding deficiency of service on its part. Complainant Pawan Kumar in his complaint said he got his minor son Udesh Partap Singh insured with the LIC on August 4, 2010 for Rs 5 lakh and deposited Rs 15,494 with the LIC as the first premium. As per terms and condition of the policy, the amount was to be realised either on the date of maturity of the policy (August 4, 2030 or on the death of the person insured, whichever occurs earlier). At the time of purchase of the policy, the son of Pawan Kumar was not suffering from any disease and was hale and hearty. But unfortunately, Udesh died on August 7, 2010 and the complainant requested the LIC to release the insured amount but the LIC tried to put off the matter on one pretext or the other, complainant alleged. The LIC in its reply admitted that the policy was issued on non-medical scheme and the complainant never informed of the death of his minor son. The LIC also denied that the complainant it to release the amount of insurance. The Forum observed deficiency of service on the part of LIC and it is liable to pay Rs 5 lakh to the complainant from August 7, 2010 till its realisation with interest at the rate of 9
per cent per annum. It also directed the LIC to give Rs 5 lakh as litigation charges to the complainant within one month of receiving of the order.
person is suffering from hypertension or diabetes, the insurance claim of the legal heirs could not be repudiated on the ground that the person had suppressed this information from the company. The Supreme Court had observed that hypertension or diabetes were not fatal in themselves. If a proper check was maintained, a person suffering from either of these problems could live a long and healthy life. In this light, the commission directed the companies to pay the insurance claim to the legal heirs of the insured persons, with interest from the date on which it was to be paid.
Case Study - Supreme Court directs LIC to pay compensation for issuing wrong policy
A bench of the Supreme Court of India in its judgement has asked the country's premier life insurer, the Life Insurance Corporation (LIC) of India Ltd to pay some compensation to widow of Kamal Singh for issuing wrong policy. Late Kamal Singh had deposited Rs 2.6 million in a proposal for LIC's New Jeevan Akshay 1 policy, but mistakenly he was given New Jeevan Dhara policy. Though, he got some monthly pension under the former insurance scheme without verifying the policy he got. Usha Kumari, his widow, approached the Rajasthan consumer commission which directed the LIC to payback amount with interest after deducting some payments. Interestingly, the national commission had rejected it. Finally when the case 'Usha Kumari vs LIC' was filed in the SC, the honorable court observed that the LIC is guilty of issuing wrong policy due to lack of due diligence in its dealings. The SC rejected the national commission's observation and asked the
insurer to pay Usha Kumari balance of the premium deposited by the insured and lump sum compensation..