LIC asked to pay Rs 70,000 compensation for deficient services

The Thane District Consumer Redressal Forum has ordered LIC to pay a compensation of Rs 70,000 to a Bhiwandi resident towards legal charges and mental suffering that he had to undergo after his insurance claim was rejected following the death of his son.
Forum President Umesh Jhavalikar and Member N D Kadam in their order last week also directed three respondents, including LIC of India, Assistant Secretary (G/ULIP) and Manager (Claims) to make a payment of Rs 50,000, the insurance amount claimed by complainant Narendrakumar Mishra.
Mishra, in his complaint, stated that he had taken the 'Children's Deferred Endowment Assurance Policy With Profits' for his son Shyamnandan (who was 13 then) effective from January 1, 1998 for a period of 17 years. Also, he paid Rs 1,142 half-yearly and the total sum assured was Rs 50,000. The last date for payment of the premium was July 1, 2014.

The policy holder was to get the maturity amount on January 01, 2015. There was a condition in the policy that it would be transfered on the name of the beneficiary (son) when he attains the age of 21 i.E on 14.04.2006.
However, his son died due to illness on June 3, 2006, but he had paid his premium regularly to LIC upto July 2005, Mishra told the Forum.
He further stated that LIC deliberately defied the conditions in the policy and rejected his claim and was thus deficient in its services towards him.

After hearing both the counsels, the Forum observed that even though the policy has not been transferred in the name of the child there is a clause that the insured amount can be paid to the heir of the insured.

The insurance company could have very well regularised and extended the policy and given benefit of the policy to the complainant by levying a penalty for non-payment of further premiums which it did not not do.
The insurance company had simply taken shelter under the technical aspects and rejected the claim which itself is deficiency in services for which it needs to pay compensation to the complainant.
For mental sufferings and losses it should pay the complainant Rs 20,000 and towards legal expenses pay Rs 50,000 all within 30 days, the Forum ruled.
Besides, the Forum also ordered the LIC to make payment of Rs, 50,000 which is the sum assured by the complainant on the name of his son.