Consumer forum in the city directed Life Insurance Corporation to pay their customer the amount owed to him through the endowment assurance policy he had applied for in 1992 and also pay a compensation for falsely claiming that the customer had borrowed loans through the policy.

Panneerselvam, a resident of Thirumullaivoyal, subscribed for an endowment assurance policy pf Rs 25,000 with the LIC in 1992 with an instalment premium of Rs 119 per month. The policy was to mature in 2012 and the customer was expected to get Rs 54,250 as the gross maturity amount. However, to his surprise he found that in the status report it was mentioned that he had obtained a loan of Rs 2140 towards the policy. The consumer categorically told the LIC that he had done no such thing.

The consumer sent a representation to LIC that the loan details were wrongly mentioned and requested that he be paid his money without any deductions. But the insurance company informed Panneerselvam that he would only be paid the maturity amount if all his dues were cleared. The company then also sent him a discharge voucher, with no signature or date mentioning the gross maturity amount as Rs 54,250 but also listed out the deductions such as the loan amount with an additional Rs 6,505 as interest on the loan and also an unpaid premium of Rs 119. After the deductions, the complainant was informed that he would be paid 45,481.

The complainant then made repeated attempts to get this mistake rectified, including a legal notice, which was ignored by the insurance company. In the midst of this confusion, the company sent a new status report without mentioning the loan but demanded that the complainant furnish his original documents but still did not make the payment to him even after the date of maturity. In their defence, the company stated in their petition that they had only made a computer error and the complainant was taking undue advantage of the Consumer Protection Act in spite of them assuring him that the maturity amount would be paid to him soon.

Taking the arguments into consideration, the forum ordered a sum of Rs 54, 250 towards the matured policy amount with an additional nine percent interest from date of maturity on August 8, 2012 to the date of the order. The company was also directed to pay Rs 10,000 as compensation and Rs 5000 towards litigation expenses.
Courtesy: NCDRC

Guide to approaching a consumer court

India's first practical guide to resolving your complaints by approaching consumer court. Guidance
Customer Complaint


Enter your email address to subscribe to our Newsletter.